Preamble

The House met at half-past Two o'clock

PRAYERS

[MR. SPEAKER in the Chair]

NEW WRIT

For Belfast, South, in the room of Robert J. Bradford, Esquire, deceased.—[Mr. Molyneaux.]

Oral Answers to Questions — TRANSPORT

Railways (Electrification)

Mr. Flannery: asked the Secretary of State for Transport whether he has yet received proposals for the electrification of the St. Pancras-Sheffield railway line north of Bedford.

The Secretary of State for Transport (Mr. David Howell): Not yet, but I look forward to receiving the British Railways Board's 10-year programme of electrification schemes.

Mr. Flannery: Will the right hon. Gentleman have a chat with Sir Peter Parker, who has certain problems on his hands, and remind him that on this line there have been problems for 10 years? There are many cities on the line—Leicester, Sheffield, Derby and Nottingham. Everybody feels bitter. Ninety per cent. of the trains on that line are late, the rolling stock—[Hon. MEMBERS: "Question."] I have asked the Minister if he will speak to the chairman of British Rail. That is the question. This rudeness is not helpful.
I will again ask the Minister if he will tell the chairman of British Rail that those who use the line have suffered for 10 years and are likely to suffer for another 10 years because of miserable rolling stock. Will the right hon. Gentleman tell the chairman to do something to set that line in order?

Mr. Howell: The answer to the hon. Gentleman's question is that I speak to the chairman of British Rail from time to time. Until we receive the full programme of electrification, which we expect in a month or so, it is not possible to determine priorities for individual routes. I note what the hon. Gentleman said.

Mr. Farr: I am a regular user of the same line. On reflection, does my right hon. Friend agree that money spent on further electrification beyond Bedford would be an utter waste as the people who operate the trains refuse to modernise their approach to their duties and the way they run the trains? Would not further modernisation be a waste of taxpayers' money?

Mr. Howell: The Government's position has always been that investment should be related to productivity. If there is no productivity, it is difficult to see how investment can be justified.

Mr. Spriggs: Will the right hon. Gentleman make it clear that the British Railways Board has not even put forward its plans for electrification of the line? Is he aware that, as soon as electrification is authorised, it will make good sense to the travelling public and to the unemployed in the area served by the line?

Mr. Howell: The overall programme has not yet been put forward on the terms set out by the Government last summer.

Mr. Marlow: Is there any point in considering any future investment in the railways? It will merely give Mr. Raymond Buckton further opportunities to create havoc and—

Mr. Speaker: Order. The hon. Gentleman must ask a question, not put forward an argument.

Mr. Howell: Is is undeniable that the present wretched strike is doing great damage and raising difficult issues about the future finances of, and investment in, the railways. I repeat to my hon. Friend the answer I gave to my hon. Friend the Member for Harborough (Mr. Farr)—that investment and productivity go together. We cannot expect one without the other.

Motor Cyclists

Mr. Sheerman an: asked the Secretary of State for Transport what are the total numbers of deaths and serious injuries to motor cyclists on roads since 1970.

The Under-Secretary of State for Transport (Mr. Kenneth Clarke): In the 11½ years up to June 1981, it is estimated that 10,800 motor cyclists were killed and 198,000 seriously injured in road accidents in Great Britain.

Mr. Sheerman: Does the Minister agree that that is an awful total? Is he not concerned that these accidents have occurred during a period when the British market has been dominated by Japanese imports? Is he aware that according to many experts those parents who allow their son or daughter to buy a motor cycle are encouraging them to take up a more dangerous pursuit than to be a Spitfire pilot in 1940? Will he seek urgent consultations with Japanese exporters, as the French have done, to sort out the hyprocrisy whereby motor cycles are imported into this country that are not allowed on Japanese roads?

Mr. Clarke: I regret that the British have allowed their motor cycle industry to be dominated by the Japanese. However, I do not believe that: this factor is directly related to present road safety problems. I had the support of the hon. Member for Huddersfield, East (Mr. Sheerman) on the Transport Bill in 1981 when the Government proposed a package of measures to try to curb the appalling number of road accidents. We are making good progress in putting those provisions into effect. We hope to have the whole package under way during 1982.

Mr. Parris: Does my hon. and learned Friend agree that this alarming increase in casualties cloaks a great increase in the number of motor cyclists on the road? In terms of casualties per motor cycle mile, the safety figures are improving.

Mr. Clarke: In terms of casualty figures per mile travelled the figures are improving, but they are still very bad compared with all other vehicles. It is 30 times more dangerous to be a motor cyclist on the road than it is to drive any other form of vehicle. That underlines the urgent need for the Government's package of motor cycle safety measures to be brought into effect.

Road Construction

Mr. Roy Hughes: hes asked the Secretary of State for Transport what is his latest estimate of total trunk road and motorway construction and maintenance expenditure in 1981–82.

Mr. Kenneth Clarke: £610 million.

Mr. Hughes: Is the Minister not concerned about the considerable underspend on this vital work? What is to happen to the £52 million for 1981-82? It will presumably revert to the Treasury. Is that not particularly galling to the Minister, bearing in mind that trunk road schemes amounting to £4,000 million are outstanding? Does he not recognise that the principal reason for opposition to proposals for heavier lorries is that there are not adequate bypasses?

Mr. Clarke: I regret that there is an underspend. It has been caused by the very keen contract prices that have been received compared with our estimates and further compounded by the bad weather, which has been delaying road construction. We are nevertheless delivering the roads programme that we promised at less cost to the taxpayer. The spend that we have achieved is 25 per cent. more in cash terms than in the previous year. This serves to underline the Government's efforts to continue to deliver the roads programme to time in future years and to build the roads that the country needs.

Mr. Viggers: Is it not a tragedy that no figure appears in the current year's expenditure for completion of the M3 near Winchester? Does my hon. and learned Friend recognise that this road is vital for the whole of Hampshire? In giving it priority, I hope that he will not be distracted by the antics of a crowd of upper-class hooligans at Winchester?

Mr. Clarke: The people I would describe as objectors to the scheme were delaying progress on the Popham to Bar End section by issuing a High Court writ challenging the orders made by the Government. I am glad to inform my hon. Friend that I hear that yesterday the writ was withdrawn by the objectors. We hope, therefore, to start construction of that scheme during this year. We are re-examining anxiously the controversial section of the bypass around Winchester. Our consulting engineers are making good progress. I believe that they are achieving a wide measure of agreement. I hope that we shall soon be back on course in replacing a dangerous stretch of road.

Fares

Mr. Booth: asked the Secretary of State for Transport if he will seek to amend the law in order to clarify the rights of local authorities other than the Greater London Council to limit fares and sustain transport services.

Mr. David Howell: No. I am not convinced that legislation is necessary.

Mr. Booth: Does the Secretary of State recall that the advice from the Government, including that of the Solicitor-General, when the Lords judgment was debated in the House was that the judgment affected only the Greater London Council? Is not the damage caused by the Conservatives of Bromley in bringing the action likely to affect many other areas? If the Government's advice that the Lords judgment affects only the GLC is sound, will the Secretary of State repeat it now and write to metropolitan authorities throughout the country to explain that that is the case?

Mr. Howell: I shall be meeting the Association of Metropolitan Authorities tomorrow. If there are problems that trouble its members, they will no doubt be raised. The association has not yet raised with me the question of legislation. What concerns the association and, indeed, people throughout the country is the need to achieve a sensible balance between the burden on ratepayers and the level of fares. It is only when one departs from common sense that difficulties arise.

Mr. Alton: I accept the need for balance. However, will the Secretary of State advise district councils, particularly in places such as Merseyside, where five district councils are trying to work out their budgets for the coming year and do not know what level of rate they should levy, how to find their way out of this quandary?

Mr. Howell: That is a matter for metropolitan and transport authorities to work out in making their budgets. Representatives of the association will be seeing me tomorrow. If there are problems, these will be raised. I have not so far been pressed on the need for legislation. The need, as I have already stated, is to achieve a balance between the ratepayer and the fare payer.

Mr. Fry: Does my right hon. Friend agree that the recent problems of the GLC show that the methods of providing public transport support are not satisfactory? Does he further agree that the time has perhaps come for a thorough investigation into methods of sustaining public transport to avoid the sort of embarrassing situation in which both he and GLC ratepayers found themselves in recent months?

Mr. Howell: There is another question on the Order Paper relating to the GLC. I shall deal with this matter at that time.

Mr. Christopher Price: Why is the Minister so grossly discourteous to his own Prime Minister on the issue? Does he not realise that during the passage of the 1969 legislation the right hon. Member for Finchley (Mrs. Thatcher) totally approved of the principles outlined by the then Government that the GLC should be allowed to subsidise London Transport? Does he realise that the right hon. Lady's honour is at stake?

Mr. Howell: It is the reputation of the memory of the hon. Gentleman that is at stake. The Government have always made it clear that a reasonable level of subsidy is acceptable. That is reflected in our transport supplementary grant. We have also made it clear that propositions that would lead to a tripling of the rates and a tenfold increase in the rate element for public transport in any authority is absurd and unfair. It penalises those least able to protect themselves.

Mr. Alexander: Does my right hon. Friend believe that, since the recent judgment, the law is clear? Does he


recall a reference in the judgment to local authorities owing a fiduciary duty to their ratepayers? Is he aware that this has confused many local authorities? If my right hon. Friend agrees that there is confusion, does he think that early legislation might resolve the matter?

Mr. Howell: The Lords judgment related particularly to legislation affecting the GLC. There is another question on the Order Paper on that matter. The fiduciary duty has always existed and remains. If the metropolitan counties now have difficulty interpreting it, they will no doubt raise the matter tomorrow at our meeting. The question of legislation affecting metropolitan counties outside the GLC has not been raised.

Cycling

Mr. Dormand: asked the Secretary of State for Transport what priorities he is giving to the various policies on cycling set out in his statement of 26 January.

Mr. Kenneth Clarke: The statement describes a range of measures to improve conditions for cyclists. All are important, but we shall give particular priority to encouraging the provision of better and safer routes.

Mr. Dormand: Will the Minister confirm that when county councils make specific reference to cycle proposals in their transport policy programmes the Government will guarantee extra money for that purpose? Will he give some priority—he has indicated that he may do so—to cycle construction standards and to training, especially for children? Is he aware that so far all that we have had from the Government are fine words and no action? As cycling produces so many benefits to the community, when will we see some practical results?

Mr. Clarke: We have given financial support to many experiments in Britain and we have produced the first cycling policy. We have asked counties to include cycling plans in their submissions for grant in their transport policy programmes. Although we cannot guarantee to meet every one, because there is a limit to local government expenditure on transport, we are encouraging them to put cycling plans in, because we wish to help. We have made provision for improving the standard of cycle construction and protecting the consumer. We already support the RoSPA cycle training proficiency scheme for schoolchildren. We are helping the society to improve that scheme.

Transport (London) Act 1969

Mr. Dubs: asked the Secretary of State for Transport if he is now prepared to seek to amend the Transport (London) Act 1969.

Mr. David Howell: As I told the House on 18 January, I am not prepared to legislate to let the GLC go back to its unbalanced policies which placed such huge burdens on ratepayers. I am prepared to introduce legislation on travel concessions for the elderly.

Mr. Dubs: When will the Secretary of State introduce travel concessions for the elderly? In the light of yesterday's clear-cut decision by the House in favour of new legislation, is the right hon. Gentleman seriously saying that he will disregard the view of the House? Does he take pleasure in causing chaos to London Transport and distress to many Londoners?

Mr. Howell: The answer to the hon. Gentleman's first question is "Soon". As to causing chaos, one has only to look back over the past seven or eight months to see the failure of the experiment attempted by those at County Hall. I voted against the Bill proposed by the right hon. Member for Battersea, North (Mr. Jay) because I did not wish Londoners to be exposed to the crucifying levels of rates with which they were being threatened. I congratulate the right hon. Gentleman on getting approval for it, but we shall have to see what progress the Bill makes on Second Reading.

Mr. Stephen Ross: Does the Secretary of State wish to see London exposed to even heavier traffic, heavier lorries, machines that cannot give change, odd amounts on the buses and the chaos that existed before we had a more sensible pricing system on our buses and tubes, which was one of the most sensible ideas that the GLC introduced, or does he have a policy that will bring people back to public transport and get traffic off the roads?

Mr. Howell: If the hon. Gentleman studied the matter with care he would see that successive Governments, including the Labour Government, concluded that indiscriminate subsidies of the sort that were being practised in the second half of last year are not necessarily the best answer and may not help the traffic problem. They damage business in central London, because of high rates, and create the sort of imbalance and difficulties that London travellers face today and which the Government are leaning over backwards to try to help the GLC to resolve. The GLC has brought the difficulties upon itself.

Mr. Squire: Does my right hon. Friend accept that many of my constituents are genuinely confused about the current difficulties and the responsibility for them? Does he agree that that confusion may be marginally reduced if the Labour majority on the GLC can agree on what it wishes to do?

Mr. Howell: It would be valuable if the GLC could now agree a budget, as it is entitled to do within the law and as it has been advised carefully, so that London Transport can settle down to a period of stability. It has a substantial subsidy of about £250 million. London takes by far the largest proportion of Britain's support for transport. On that basis it is possible to develop an efficient, low-cost system of transport in Greater London. I am sure that is the right way forward rather than attempting to go through the chaotic experiences of recent months.

Mr. Robert Hughes: The Secretary of State was probably as surprised as anyone by the House of Lords decision. The Bill introduced by my right hon. Friend the Member for Battersea, North (Mr. Jay) will restore the law to what everyone thought it was. Taking account of the will of the House, will the right hon. Gentleman guarantee that on Second Reading he will allow a free vote and will not connive with his Whips to avoid the decision of the House being repeated, which was that the GLC should have the powers that it believed it had and under which it believed it was operating legally?

Mr. Howell: I can give no guarantees about the progress of legislation in the House.

Mr. Chapman: As the GLC reduced public transport fares by 25 per cent. less than five months ago—an act found subsequently to be illegal—will my right hon.
Friend inquire why the GLC has the effrontery to con the people of London into believing that fares must necessarily be doubled next month?

Mr. Howell: The problems created by the so-called bold experiment that led to the threatened large increase in fares had to be put right. The experiment was described by some as successful, but it is evident that it was running into severe difficulties even before the Lords judgment—[HON. MEMBERS: "Like what?"' The House of Lords declared that what was being pursued was illegal. It is necessary for the 1982 London Transport budget to be approved by the GLC so that some progress and stability can be achieved. It is regrettable that it involves a 100 per cent. increase in fares, but it is necessary to get London Transport back on track after the chaos of recent months.

Mr. Spearing: Does the Secretary of State agree that the doubling will not bring the accounts completely into balance? The chairman of London Transport, when talking about traffic balance, said that after 21 March the cost will be 12p per mile for tube and bus passengers and that it would be cheaper for two people to travel in a private car. Is that the balance that the Secretary of State wishes to see in London Transport, or will he legislate in some other way so that, like every other city in the world, we can have a properly balanced system?

Mr. Howell: The balance must take into account from where the money comes. The hon. Gentleman cannot condone a policy that involves a tenfold increase in the transport element of rates for this year and a twentyfold increase next year. That would involve another £200 million or £300 million to be paid by London ratepayers. A fairer balance must be struck.

Railways (Electrification)

Mr. Foulkes: asked the Secretary of State for Transport if he has yet received a proposal from British Railways for the electrification of the GlasgowKilmarnock-Carlisle railway line.

Mr. Kenneth Clarke: No, Sir.

Mr. Foulkes: Is the Minister aware that it is widely reported the British Rail's proposals will not include the electrification of this line? Will he draw attention to the importance of the line in providing a direct link from the south to Prestwick, an alternative to the Motherwell line and a direct service for the people of Auchinleck, Cunmock and Kilmarnock, and ask British Rail to include it in the electrification programme?

Mr. Clarke: I should be surprised if it were included, because it was not included in the larger option in the joint review carried out by British Rail and the Government last year. There are other lines to which I would expect British Rail to give higher priority. Some services are run by Strathclyde regional council, but even that council is giving higher priority to the line to Ayr. I admire the hon. Gentleman's enthusiasm, but I cannot hold out the hope that this line will have a high priority.

Sir Hector Monro: Will my hon. and learned Friend bear in mind that the majority of the railway line runs through my constituency, that it is a most important link between London and Glasgow and that it also carries the boat train to Stranraer? Will he provoke British Rail into giving the line high priority and ensure that the inter-city train stops at a station in my constituency?

Mr. Clarke: I wish that I could say that the discovery of the constituency through which the line runs would affect the statement that I have just made, but we are waiting for British Rail's programme on electrification. The Government and the board wish to consider the future of the railways and to plan for that. We can then decide the priorities in the Strathclyde region.

Historic Towns (Bypasses)

Mr. Farr: asked the Secretary of State for Transport if he will make a statement on progress towards bypassing all historic towns.

Mr. David Howell: Over half of the historic towns on trunk roads which could benefit from a bypass now have one, and schemes are planned for almost all the rest. In my review of the trunk road programme, which will be published next week, I am giving priority to the need to make room for a number of other urgent bypasses. As for local roads, I gave priority to bypasses in the recent transport supplementary grant allocation and I intend to continue doing so.

Mr. Farr: I am grateful to my right hon. Friend for that answer. Before he produces the report next week, will he look at the sums again to see whether a marked advance in the bypass programme should take place, especially in view of the Armitage report and its implications for historic towns and the environment?

Mr. Howell: The bypass scheme is now very large. The traffic and local schemes now under construction will relieve about 100 towns and villages, with another 120 benefiting from schemes starting in the next two years. I am considering whether the programme can be speeded up.

Mr. Alexander W. Lyon: Does that include the northern part of the bypass round York, which is subject to the TSG allocation?

Mr. Howell: I shall have to write to the hon. Gentleman about that matter.

Mr. Heddle: Does my right hon. Friend agree that it was Sir Robert Peel's manifesto that made Tamworth historic? In the light of his inspector's inability and utter failure to deliver his report on the Tamworth section of the M42 following a public inquiry two years ago, does my right hon. Friend agree that this is now the Tamworth fiasco? Will he obtain an undertaking from the inspector that his Department will receive his report by 31 March?

Mr. Howell: I am as concerned as my hon. Friend about the delay. We will do everything possible to expedite the matter.

Mr. Bagier: When are the bypass schemes that the Secretary of State has just announced estimated to finish? Until they are finished, will he delay the introduction of heavier lorries on British roads?

Mr. Howell: I announced a programme of bypasses. I said that 120 communities would benefit from schemes starting in the next two years. A total of 150 bypasses are included in the trunk road programme. It is a rolling and continuing programme. Many communities and villages will be relieved as motorways are completed. It is necessary to deal with the whole of freight transportation, including freight by rail. At the moment there are


difficulties with such transport. It is necessary to treat all those factors as a whole. They must advance together on all fronts.

Sir Albert Costain: Has my right hon. Friend observed that those who are opposing his proposals for heavier lorries are showing photographs of a large TIR lorry passing a church with its spire on the ground in Brookland in my constituency? Does he appreciate that I have been pressing him for a number of years for a bypass to avoid that bad corner? The photograph hints that lorries have knocked the spire off the church. That is not true. Will my right hon. Friend press on with the bypass for Brookland?

Mr. Howell: I am grateful to my hon. Friend for drawing to my attention the locality of the photograph to which he refers. I shall investigate further the point that he raised. I have said enough about the general bypass programme to show the House that it is substantial. I am looking at it to see whether it can be speeded up even more.

Railways (Modernisation)

Mr. Madel: asked the Secretary of State for Transport when he next plans to meet the chairman of British Railways to discuss further modernisation of the rail network; and if he will make a statement.

Mr. David Howell: I meet the chairman frequently to discuss matters of mutual interest.

Mr. Madel: Does my right hon. Friend take the view that if disruption continues on the railways, future modernisation and investment are bound to be at risk? Will he bear in mind the competing needs of the road network for more public funds? Will he also bear in mind the need for more bypasses to be provided in my constituency, to name but one area?

Mr. Howell: To take one area—the bypass in my hon. Friend's constituency—I am aware of the discussions about the possibility of our paying a 100 per cent. grant for the Leighton—Linslade bypass. I hope that we shall be able to do so. However, I can make no promises. With regard to the broader question of resources, it is correct that deep damage is being caused by the wretched rail strike. There will be a clear necessity to press ahead with a great many measures to overcome the losses on the railways.

Mr. Cook: May I bring the Secretary of State back to the question on the Order Paper? Is he not aware that any investment and modernisation of British Rail will have to come out of the external financing limit, which he has increased by a rate that is substantially less than the rate of inflation anticipated by the Treasury? Is he also aware that that entire increase in the EFL for next year will be wiped out by the borrowings of recent weeks? As his Government encouraged British Rail to go ahead with that borrowing in recent weeks, will he at the least make sure that British Rail is not penalised by an unreaslistic level of EFL next year, which will mean that there will be no modernisation, no investment, and little maintenance of the railway network?

Mr. Howell: The value of the EFL for next year has been maintained in real terms. The real need is for all concerned, including those in the other railway unions, to urge the Associated Society of Locomotive Engineers and

Firemen to end its destructive strike and to recognise, along with those other unions, that increased pay, productivity and investment go hand in hand. That is where the future of the railways lies. That is the way that we were going, although not at a speed that everyone wanted, before this wretched strike. There is no doubt that the longer the strike continues, the more it will jeopardise the jobs of many people on the railways and the future of many projects.

Mr. Adley: Does my right hon. Friend agree that it would be extremely unfair on the majority of railwaymen in the National Union of Railwaymen, on the British Railways Board and on the travelling public if ASLEF's tactics were to result in the long term in the jobs of NUR and of most of the Transport Salaried Staffs' Association members being put at risk? There is some doubt about this matter. Will my right hon. Friend confirm that the British Railways Board, ASLEF, NUR and TSSA all signed the same document, and that all except ASLEF are willing to abide by what they signed? Is that not the reality? Has my right hon. Friend any reason to believe either that the four signatories were not sober or that they were not aware of what they were signing?

Mr. Howell: As the inquiry is meeting now, it is wrong for me to comment on the merits of the dispute. There is no doubt that the strike is causing deep damage both in the short and longer term. As the future of the railways depends on its customers, and as the customers are at present in an awkward plight, particularly the long-suffering commuters, all that spells "bad" for the railways. The sooner that all concerned press ASLEF to lift its silly strike, the better.

Several hon. Members: rose—

Mr. Speaker: Order. I propose to call two more Back Benchers before I call Front Bench Members.

Mr. Les Huckfield: I shall revert to the question on the Order Paper. How can the Secretary of State say that an increase in the EFL of only £30 million maintains the value of that limit in real terms? If he wants to make a constructive intervention in the current dispute—he has obviously been using this question to make an intervention in the dispute—why does he not tell the British Railways Board to stick to the law, because every successive piece of transport legislation requires it to adhere to the existing machinery of negotiation? By going outside that machinery of negotiation the British Railways Board is breaking the law.

Mr. Howell: I hope that the hon. Gentleman will also make a constructive intervention. The most constructive intervention that he could make—I believe that he realises this—is to urge ASLEF to end its damaging strike, which is benefiting no one on the railways, no one in the unions, none of the railways' customers, and no part of the future of British Rail. He should urge ASLEF to recognise that increased pay and increased productivity must go together. That must be where the future of the railways lies.

Mr. Ward: When he next meets the chairman of British Rail, will my right hon. Friend tell him that many people have managed to do well without the services of British Rail over the last few weeks, a position that is likely to continue after the strike is over? Will he impress upon him that many people, certainly in the area that I represent, are fed up to the back teeth with being led by


the nose by a small group of people in ASLEF who are apparently determined to destroy the livelihoods of people in my constituency?

Mr. Howell: I recognise that there is strong feeling and that many commuters have been extremely long—suffering and have gone through difficult times. However, my hon. Friend's question also reminds the House that the future of the railways depends on its customers. If the failure to increase productivity and to maintain the progress that was beginning to develop last year continues, customers will go away, which will damage the railway system. It is the customers whom the railways are designed to serve.

Mr. Booth: Will the Secretary of State respond to the point that I put to him by letter earlier this week, drawing his attention to how highly damaging it was to the already slim prospects of resolving the current rail dispute for him to leave uncorrected the newspaper reports that suggest that the Government are considering a further curtailment of British Rail investment in the light of the dispute? Will he tell those of his hon. Friends who suggest that railway investment is being curtailed as a result of the dispute that they are grossly misrepresenting the facts and that the Government had curtailed railway investment long before the dispute? Will he tell them that the dispute is now proceeding on an issue that has been put before an inquiry in which a union is properly contending that a major nationalised industry has failed to carry out its obligations within the railways' negotiating machinery?

Mr. Howell: There is a perfectly realistic message, which I hope the right hon. Gentleman will convey to those who are causing disruption on the railways. It is that if they pursue that disruption, and if they believe that higher pay can be achieved without productivity, or that new investment and equipment can be provided without de—manning and new work practices, they will cause untold damage. ASLEF would be wise to desist from its disruption.
As an inquiry is now taking place, it would be wrong to discuss in detail the merits of the dispute.

Mr. Les Huckfield: But the right hon. Gentleman has gone into the merits.

Mr. Howell: I hope that the right hon. Member for Barrow-in-Furness (Mr. Booth) will make quite clear the view that I hope he shares with me that the ASLEF disruption being imposed on the railways and other railway workers is deeply damaging to the future of our railway system, and that ASLEF should desist.

Road Accidents

Sir William van Straubenzee: asked the Secretary of State for Transport whether he has received figures for road accidents for the nearest convenient period which includes Christmas 1981; and how these figures compare with previous years.

Mr. Kenneth Clarke: I regret to say that the information will not be available for several months.

Sir William van Straubenzee: I am grateful to my hon. and learned Friend for that helpful reply. Based on previous figures, is the trend rising or falling?

Mr. Clarke: The trend has been falling for many years. We hope that that will continue. There is no case for being

complacent, which is why the Government are taking steps on motor cycle safety, drink and drive and the totting-up laws.

Mr. Arthur Lewis: Why is it that all Government Departments, especially Transport, take months and months to provide information that should be available within a few days? The Department of Transport has computers, electronic aids and staff, yet cannot provide information on what happened last week. Will the Minister ask his staff to give effect to the words of a famous man, and get their fingers out?

Mr. Clarke: I cannot always claim that my Department reacts with great speed, but in the case in question the delay is being caused by police and local authorities, which must analyse a large number of national figures.

"Lorries, People and the Environment"

Mr. Cadbury: asked the Secretary of State for Transport what representations he has had so far from industry supporting the Government's White Paper on "Lorries, People and the Environment."

Mr. David Howell: The CBI, the Freight Transport Association, the Road Haulage Association, the Association of British Chambers of Commerce, and many other employers and trade associations have supported our White Paper, with its comprehensive approach to the lorry problem, which meets both environmental and economic needs. Companies in the food, chemical, building materials, motor and other industries have also welcomed our proposals.

Mr. Cadbury: Does my right hon. Friend agree that, provided Armitage's recommendations are carried out, the introduction of 40-tonne lorries will bring environmental benefits to Britain, as well as cost benefits to the consumer? Does he further agree that if we do not allow a heavier lorry in Britain it will be a serious blow to the British truck industry, which needs a domestic market to develop such a vehicle if it is ever to compete successfully overseas?

Mr. Howell: I agree with my hon. Friend. It is not often that an issue arises when three valuable objectives can be advanced at once, namely, improvements in the environment, improvement in industrial competitiveness and improvement in the prospect for jobs. It will also provide export opportunities. When such an opportunity arises, we would be unwise to turn it down.

Mr. Stoddart: Is the right hon. Gentleman aware that all the representations in the world from various organisations will not convince the British public that they can trust the freight transport industry? Does he agree that for a long time that industry has let down the public by allowing lorries into places where they should not go, damaging the environment beyond repair and beyond endurance? Does he not realise that before he gets the support of the House for a 40-tonne lorry, the road transport industry must do a great deal more to convince the public that it will behave better in future?

Mr. Howell: The hon. Gentleman is looking at the issue from too narrow a basis. The reality is that road freight in Britain is considerable, and is bound to increase with economic growth—whether or not the railways


succeed in winning back more freight. It is necessary to pursue a comprehensive approach that harmonises the environment with extensive road freight. The Government's White Paper shows the way forward, and pro-environmentalists who oppose it are on the wrong side of the argument.

Several Hon. Members: rose—

Mr. Speaker: Order. This subject arises again on question 13.

British Rail

Mr. Ioan Evans: asked the Secretary of State for Transport if he will make a statement on the future financing of British Railways.

Mr. Kenneth Clarke: The external financing limit for 1982–83 has been set at £950 million, which is the same level in real terms as the external financing limit originally set for 1981–82.

Mr. Evans: What action will the Minister take to bring a just settlement to the dispute on the railways by bringing British Rail and the railway unions together? In view of the disastrous effect of the Government's financial and industrial policies on British industry generally, will the hon. and learned Gentleman agree not to use this dispute as an excuse to privatise sections of the railway industry?

Mr. Clarke: We do not believe that Government intervention would be helpful at the present time. We hope that ACAS and Lord McCarthy will succeed in bringing together all the parties to achieve a sensible settlement. The Government have a long-standing agreement with British Rail to introduce private capital into its hotels and Sealink. That was agreed with Sir Peter Parker two years ago. I am sure that we shall soon see that agreement being fulfilled.

Mr. John Townend: Will my hon. and learned Friend make it quite clear that the Government will not increase the EFL to cover the losses caused by the strike, and that, if money is needed for investment in the railways, far from introducing private capital, the Government will now encourage the British Railways Board to sell off its non-railway assets lock, stock and barrel, and without the condition, that the hotels should continue to operate an NUR closed shop?

Mr. Clarke: The Government will have to consider the long-term financial problems that the strike is causing. As my right hon. Friend the Secretary of State said, we wish to look to the long-term future once some common sense is achieved. On the question of non-railway assets, it would be of great benefit to the hotels business and Sealink if they were free of public sector constraints and had access to private capital. On that basis, the Government and the board are pursuing the policy of privatisation which, I hope, will soon reach a successful conclusion.

Mr. Speaker: Mr. Robert Hughes.

Mr. Robert Hughes: Is the Minister aware that the continual insistence—

Mr. Speaker: Order. I called the hon. Gentleman in the hope that he would ask the next question on the Order Paper. Is he asking a supplementary question on No. 12

Mr. Hughes: With permission, Mr. Speaker, my question arises on question 12. Is not the Government's

insistence on linking investment with industrial relations in the railway industry making it difficult to gain the trust of the unions on future plans?

Mr. Clarke: Public investment must achieve a real return and a real economic benefit. An essential part of that is to improve the productivity and performance of the railways. That goes hand in hand with common sense. If the railways fail to achieve higher productivity, that makes it difficult for the Government to contemplate beginning vast programmes of electrification or investment.

Mr. Michael McNair-Wilson: Does my hon. and learned Friend believe that future financing should be made conditional upon British Rail and the unions reducing manning levels to realistic figures?

Mr. Clarke: We must examine the financial needs of the railways in the light of all circumstances, including trading conditions, business performance and productivity. We have done that with flexibility and realism during the past two or three years. In the long run, the health of the railways depends on getting rid of overmanning, restrictive working practices and operating the railways as a modern railway should be operated. The two go inextricably hand in hand.

"Lorries, People and the Environment"

Mr. Robert Hughes: asked the Secretary of State for Transport if he will consult local authorities on aspects of his White Paper on "Lorries, People and the Environment" other than the draft construction and use regulations.

Mr. David Howell: My Department is consulting the local authority associations on a number of aspects of the White Paper. These include lorry controls, the effects of lorry weights on bridges, techniques for assessing the environmental effect of lorries, and the improvement of enforcement procedures.

Mr. Hughes: Is it not true that the consultations that the Minister is having with local authorities on the construction and use regulations are under a time limit? Es it not true also that local authorities believe that that is all that the Government are concerned about before they bring these proposals back? Will the Minister make it clear that the right consultations with local authorities on all aspects of the Government's White Paper will be completed before he brings the draft construction and use regulations back to the House for approval or otherwise?

Mr. Howell: The situation is not quite as the hon. Gentleman says. I have already had discussions—for instance with the ACC—on a wide range of issues, as well as on the construction and use aspects. These are all matters on which I am consulting, and on which the Government intend to bring forward and develop constructive policies on the lines set out in the White Paper.

Several Hon. Members: rose—

Mr. Speaker: Order. I shall call one hon. Member from the Government Benches to hold the balance.

Mr. Nicholas Winterton: Although I wish to associate myself with the earlier remarks of my hon. Friend the Member for Birmingham, Northfield (Mr. Cadbury), does my right hon. Friend agree that the Government proposals


contained in the White Paper would be much more acceptable to the overwhelming majority of people who are concerned about the environment if the proposals went along with an increase in and speeding up of the designation of commercial routes for heavy vehicles so that rural and country routes and lanes, which at present are used by the existing weight of vehicle and for which the loads were not designed, would be protected and that the Government would therefore get much more support for what is good for British—

Mr. Speaker: Order.

Mr. Howell: I agree with the general thrust of my hon. Friend's question and statement. It is clear that designating routes so that lorries do not go on roads for which they were never designed or built must be part of a better environmental future. We are discussing with local authorities as a matter of urgency how to carry out the designation of lorry routes, but my hon. Friend should realise that passing lorries down one route inevitably creates problems for the people who live there. One person's problem is another person's gain. That is the difficulty.

Mr. Speaker: Order. Questions and answers have been inordinately long this afternoon. That cuts out people who have the right to expect their questions to be called. I shall allow two minutes extra at 3.30 pm

Oral Answers to Questions — CIVIL SERVICE

Jobs (Dispersal)

Mr. Canavan: asked the Minister for the Civil Service whether the Government have any further plans for the dispersal of Civil Service jobs to Scotland.

The Minister of State, Treasury (Mr. Barney Hayhoe): There are at present no plans to extend the Government's dispersal programme beyond what was announced on 26 July 1979.

Mr. Canavan: Is it not a damning indictment of the Government's policies that one of the few growth areas in the Civil Service in Scotland recently has been the employment of more professional snoopers for the harassment of the unemployed and other people receiving benefit, when the Government should be creating more employment in Scotland, for example, by shifting the entire Department of Energy from London to the west of Scotland to compensate for the public asset-stripping of the British National Oil Corporation, which the Labour Government founded and which has its headquarters in Scotland?

Mr. Hayhoe: The hon. Gentleman's supplementary question seems to have little to do with his original question, and I repudiate his suggestions.

Mr. Woolmer: On the question of the dispersal of civil servants throughout the regions, does the Minister agree that an important element in the recruitment of civil servants in the regions is their pay? In their current pay negotiations, do the Government intend to vary the pay offer according to the regional location of the employees? Bearing that in mind, when does the hon. Gentleman expect the negotiations to be concluded, and when will he come to the House with news of those negotiations?

Mr. Hayhoe: Negotiations about this year's pay claim have started with the Civil Service and an offer will be made by the Government fairly soon. It would not be right to make any further comments at this stage.

Management and Personnel Office

Mr. Wrigglesworth: asked the Minister for the Civil Service what are the responsibilities of the second permanent secretary in the Management and Personnel Office.

Mr. Hayhoe: As my right hon. Friend the Prime Minister told the House on 12 November, the second permanent secretary, Mr. John Cassels, assists the permanent secretary, Sir Robert Armstrong, in the business of the Management and Personnel Office, and details of the MPO's functions were set out in the note placed in the Library on that day.

Mr. Wrigglesworth: Does the Minister agree that at least three permanent secretaries are now responsible for the Civil Service, and that two Departments are responsible for the Civil Service where there was one Department before? Does he agree that that is not a very efficient way to run the Civil Service and that it is not a good way to secure progressive personnel policies? Will he see whether a better and more efficient system can be found?

Mr. Hayhoe: The hon. Gentleman made that observation in the debate on the transfer of function orders on 20 January. It was wrong then, and it is wrong today.

Mr. Alan Williams: Will the Minister explain what has happened to the action document that he promised, outlining the function and role of the new Management and Personnel Office? Is not the document already six weeks behind time, and is not the delay a recognition of the fact that, instead of resolving the old shortcomings of the Civil Service Department, the Government have created an administrative nightmare and now find it impossible to draw meaningful lines of demarcation between the Cabinet Office and the Treasury?

Mr. Hayhoe: The preparation of the action document by my right hon. and noble Friend the Chancellor of the Duchy is well in hand, and it will be made available to the Select Committee and others as soon as it is ready.

Mr. Eggar: Who is responsible within my hon. Friend's Department for checking the amount of time off that is permitted to civil servants to follow trade union activities? Are press reports correct that it costs £14 million? What steps will be taken to ensure that expenses of this kind are not incurred on behalf of taxpayers?

Mr. Hayhoe: All Ministers in charge of Departments take responsibility for the work of their Departments. Perhaps I should remind my hon. Friend that the facilities agreement under which time off is given to civil servants to be involved in industrial relations matters was made in 1974. It has been and is under review by the Government. It is also important to note that there are legal requirements for such time off to be given. Clearly it is important that the Government, as an employer, meet their legal requirements.

Mr. Robert Sheldon: Is it not clear that the recent changes in the Civil Service are designed to discipline it rather than to improve it

Mr. Hayhoe: No. That suggestion has no foundation.

Mr. Speaker: Order. We now return to Transport Questions.

Mr. Sheerman: On a point of order, Mr. Speaker. Can it be right that my question 56, which was tabled to the Minister for the Civil Service, can be transferred to another Department without the Member being informed

Mr. Speaker: Is is customary to inform hon. Members, but will the hon. Member allow questions to continue and raise the matter with me later, because, in any case, the question on the Order Paper is addressed to the Secretary of State for Industry. I do not know what has happened.

Oral Answers to Questions — TRANSPORT

A27 (Havant-Chichester)

Mr. Nelson: asked the Secretary of State for Transport whether he will now make a statement about the route of the A27 trunk road between Havant and Chichester.

Mr. Kenneth Clarke: I have today announced the decision of my right hon. Friends, following a public inquiry, to proceed with the Department's published proposals for a new route for the A27 between Havant and Chichester, subject to further consultations on a number of modifications proposed by the inspector.

Mr. Nelson: I am obliged to you, Mr. Speaker. I am also grateful to my hon. and learned Friend for what he has said. I congratulate and thank my hon. and learned Friend for the judgment that he has made and for his willingness to respond to public opinion, to reject the recommendation of the inspector's report on the matter and to choose the route which, as a result, will be built much sooner, save many lives, and will not encroach into the countryside to the north.

Mr. Clarke: I thank my hon. Friend for supporting what was not an easy decision.

Seat Belts

Mr. Hal Miller: asked the Secretary of State for Transport when he intends to introduce regulations on the compulsory wearing of seat belts.

Mr. David Howell: I laid a statement of my proposals before Parliament on 8 December. I am required to allow at least three months from that date to elapse before I lay the regulations themselves. I expect therefore to lay them as soon as practicable after 8 March.

Mr. Miller: When preparing the regulations, will my right hon. Friend consider the need to ensure standardisation of seat belts? Difficulties are caused to drivers by the wide variety of release mechanisms and strap adjustments on the market.

Mr. Howell: Release mechanisms are more or less standard on vehicles built since 1973, but I shall bear in mind my hon. Friend's request. There are mechanisms on the market which can be adjusted up and down for different sized drivers. Moreover, the anchorage points by the shoulder can be relocated lower or higher depending on the driver's size.

Mr. Bidwell: Given the practice in most other Western European countries, is the right hon. Gentleman giving due weight to the unanimous opinion of taxi drivers that they should be exempt from the need to wear seat belts owing to the nature of their duties?

Mr. Howell: The official consultation period has now ended, but I am carefully considering representations. including those from taxi drivers.

Mr. Jessel: As each week's delay results in the loss of about 15 lives, will my right hon. Friend ensure that the regulations are introduced as soon as the law allows?

Mr. Howell: I am bound by the law. The debate on the regulations is expected in March or April and, if they are approved, it will be followed by a running-in period, which is vital. The regulations will then be brought into force in the summer.

Mr. Arthur Lewis: As there is irrefutable evidence from throughout the world that lives have been lost because people have been compelled to wear seat belts, will the right hon. Gentleman ensure that the regulations enable the next of kin of a person who loses his or her life through wearing a seat belt to obtain compensation from the Department of Transport? Surely that must be regarded as a fair and reasonable request, whether or not one is in favour of wearing seat belts.

Mr. Howell: These matters have been fully debated and answered in Parliament.

Mr. Nicholas Winterton: My right hon. Friend must answer "Yes".

Mr. Howell: These matters have been fully debated and Parliament decided that I should be required to act. I shall bring forward regulations. We shall carefully consider all requests for exemption, but the broader point raised by the hon. Gentleman was taken into account when Parliament reached its majority decision. Hon. Members had the opportunity to express their views at that time

Questions To Ministers

Mr. Barry Sheerman: On a point of order, Mr. Speaker. Is it right that a question should be transferred to a different Department without the knowledge of the hon. Member concerned? I realise that the Minister has left early, but it seems strange that only open-ended questions can be tabled to the Civil Service while a specific question such as mine should be moved sideways without permission.

Mr. Speaker: The hon. Gentleman has a legitimate grievance. Hon. Members should be notified when questions are transferred to another Department. I have 'made inquiries since the hon. Gentleman raised the point originally and I understand that the Table Office was notified on 28 January. There was probably a slip-up and the hon. Gentleman was not notified. It is the custom for hon. Members to be notified when questions are transferred to other Ministers.

Mr. Kevin McNamara: Further to that point of order, Mr. Speaker. I am sure that the House is grateful for your explanation to my hon. Friend the Member for Huddersfield, East (Mr. Sheerman). It would assist the House if you, Mr. Speaker, could obtain for the House a directive from the Government on responsibility for the Civil Service Department and the deployment of civil servants within Departments. Who is responsible for that deployment? Is it the Civil Service Department, or the Ministers? Without that knowledge we cannot know whether people are being used properly.

Mr. Speaker: I advise the hon. Gentleman that I cannot answer that question. However, on a Tuesday or Thursday there might be a right hon. Member who could answer it. I cannot.

Mr. Les Huckfield: On a point of order, Mr. Speaker. I seek your guidance, Mr. Speaker, because today the Secretary of State for Transport made a deliberate and determined attempt to use questions—[Interruption.]

Mr. Speaker: Order. Let us hear the point of order. In my experience, all hon. Members use Question Time for some purpose. However, perhaps the hon. Gentleman has a point of order on which I can rule.

Mr. Huckfield: With respect, Mr. Speaker, I think that you can rule on this point of order. As the Secretary of State clearly used question 9 to make a prepared statement, in which he intended to intervene—[Interruption.]

Mr. Speaker: Order. I am sorry to interrupt the hon. Gentleman but I must have some clear sign that he is raising a point of order and not merely a debating point.

Mr. Huckfield: If I am enabled to reach at least the first comma, I shall complete the sentence.

Mr. Speaker: Whether the hon. Gentleman completes his sentence depends on the way in which he does it. He is not entitled merely to use his position to make ex parte statements, expecting me to sit here until the end and then say that he has not raised a point of order. The hon. Gentleman must raise a point of order.

Mr. Huckfield: As the Secretary of State clearly used question 9—on an entirely different matter—to read out a statement that he had prepared beforehand and that he used to intervene in the rail dispute, and as he persistently intervened in that dispute—

Mr. Speaker: Order. The hon. Gentleman must raise a point of order and cannot merely make charges about another hon. Member. Will he tell me which order has been broken?

Mr. Huckfield: I am merely trying to say that since the Secretary of State continually makes inflammatory statements about the dispute—[Interruption.]

Mr. Speaker: Order. It is clear that the hon. Gentleman does not have a point of order.

Mr. Huckfield: rose—

Hon. Members: Name him.

Mr. Speaker: I have no desire to name any hon. Member, but the hon. Member for Nuneaton (Mr. Huckfield) must realise that he is not raising a point of order; he is adducing an argument.

Mr. Arthur Lewis: On a point of order, Mr. Speaker. I think that I have a point of order and that you will rule, Mr. Speaker, that it is. If Mr. Speaker or the Chairman of Ways and Means allows an hon. Member or a Minister to make a statement, must it not be in order? Mr. Speaker cannot be wrong—[Interruption.]. If we wish to criticise, we must table a substantive motion. Whether or not the Minister did what my hon. Friend the Member for Nuneaton (Mr. Huckfield) tried to say that he did, the fact is that Mr. Speaker allowed it and therefore it must be in order.

Mr. Speaker: I am sure that the whole House will share my high opinion of the hon. Gentleman's judgment.

Access to Commons and Open Country

Dr. David Clark: I beg to move,
That leave be given to bring in a Bill to amend sections 193 and 194 of the Law of Property Act 1925; to clarify the meaning of the Commons Registration Act 1965; to grant a right of public access to open country (as defined in the National Parks and Access to the Countryside Act 1949 as amended by the Countryside Act 1968); and for connected purposes.
The aim of the Bill would be threefold. First, it would ask for and permit access to all legal commons. Secondly, it would amend the Commons Registration Act 1965. Thirdly, it would give the general public access to all open moorland for recreational pursuits. The Bill would be beneficial to all people, to townsmen and countrymen alike. In a built-up country such as ours, it would probably be of more benefits to townsfolk than to other people.
I remind hon. Members that from time immemorial this House has been concerned with the rights of commons and the rights of commoners. Indeed, the very existence of the House depends on that fact. To remind hon. Members that that is not new, I have in front of me an appeal dated 1649 to the House of Commons desiring an answer:
Whether the Common—people shall have the quiet enjoyment of the Commons and Waste Land; Or whether they shall be under the will of the Lords of the manors still.
That question, posed to the House in 1649, is still pertinent today. Indeed, I wish it were not.
A battle for access to the commons has taken place over the past 300 years. A century and a quarter ago the Commons, Open Spaces and Footpaths Preservation Society was established to fight for commons and the right of access to them. It is due to its efforts that we have access to Hampstead Heath, Clapham Common, and many other commons in London and elsewhere.
The other major legislative advance made by the Society was to persuade the House in 1925 to grant complete and free access to all urban commons. That included many parts of the countryside as well—for example, the southern part of the Lake District. I should like to extend that access to all commons. In support, I cite the Royal Commission of 1958 and the departmental working party of the Department of the Environment of 1978. They both recommended that people should have the right of access to common land. It is time that we put those recommendations into practice.
The purpose of the second part of the Bill is to amend the Commons Registration Act 1965. Many of us thought that that Act would register common land once and for all. It was felt by all sides that it would remove from the area of dispute the problems which occur with village greens and common land. Unfortunately, we have been disappointed.
The Central Electricity Generating Board v Clwyd County Council case in 1976 and the Box Parish Council v Lacey case in 1978 have raised a number of major anomalies in the 1965 Act which were not foreseen by Parliament. Indeed, they run completely counter to the spirit and the wish of Parliament in 1965. The result is that hundreds of thousands of acres of common land in England and Wales are now under serious threat.
Lord Halifax has applied for Tillmire Common, York, a finally registered common, to be deregistered. Lord Peel

has applied for the Keldside Allotment at Muker in the Dales national park to be deregistered. Lord Lichfield has applied for the Hollies Common in Staffordshire, a finally registered common, to be deregistered. The Duchy of Cornwall has applied for Poundbury Camp in Dorchester, an urban common to which every individual has a right of access, to be deregistered. If it is deregistered, the right of access goes with it. With all those noble Lords having power and influence under the hereditary principle, I maintain that the ordinary man and woman have hereditary rights to commons, and that it is the duty of this House to insist that those rights be protected.
Her Majesty's Government are aware of the problems. When I and the hon. Member for Chipping Barnet (Mr. Chapman) went to see the previous Minister, he listened to us, he agreed that there were problems, and he suggested or implied that the Government might bring forward legislation in a future Session, possibly the next Session, to try to rectify the matter. We maintain that we cannot wait that long.
I have in my possession a memorandum from the solicitor of the county of Dorset in which he estimates that 75 per cent. of all the commons in Dorset are under threat, so the need for action is urgent.
Two years ago, in an independent survey, it was found that walking was the most popular sport in the United Kingdom. Over 20 per cent. of the population were involved in that hobby.
We live in a crowded island. We all know the problems—I know that the Minister does—within national parks, and the pressure points, yet there are many acres of open land, defined under the Countryside Act 1968—land such as moor, heath, down, cliff, mountain and foreshore—which could and should be open to access for the general public.
All the learned bodies which have considered the subject—from the Dower and the Hobhouse reports in 1945 and 1947 right through to current ones— —have recommended that there should be the right of access for the general public to this land.
As I have said, the House has always been jealous about protecting the rights of commons. Our access to commons, and the very existence of many commons, is under threat. The time is now appropriate for us to take action. If the House would grant me facilities to pursue the Bill, I believe that remedial action could be taken.

Question put and agreed to.

Bill ordered to be brought in by Dr. David Clark, Mr. Andrew F. Bennett, Mr. D. N. Campbell—Savours, Mr. Patrick Cormack, Mr. Sydney Chapman, Mr. Alfred Dubs, Mr. Frank Hooley, Mr. Peter Hardy, Mr. Leslie Spriggs, Mr. Phillip Whitehead and Mr. Frederick Willey.

ACCESS TO COMMONS AND OPEN COUNTRY

Dr. David Clark accordingly presented a Bill to amend sections 193 and 194 of the Law of Property Act 1925; to clarify the meaning of the Commons Registration Act 1965; to grant a right of public access to open country (as defined in the National Parks and Access to the Countryside Act 1949 as amended by the Countryside Act 1968); and for connected purposes: And the same was read the First time; and ordered to be read a Second time upon Friday 19 February and to be printed [Bill 64].

Rate Support Grant (Scotland)

The Secretary of State for Scotland (Mr. George Younger): I beg to move,
That the Rate Support Grant (Scotland) Order 1982, a copy of which was laid before this House on 22 January, be approved.
In one sense at any rate the debate today on the rate support grant order will be something of a watershed in these events, of which I calculate that I have so far attended 19 in this House. Today we are able, for the first time that I can remember, to have a debate on the Floor of the House at a reasonable hour. If on nothing else, I think I shall carry the whole House with me in saying how grateful we are to my right hon. Friend the Leader of the House and all concerned for this change in the business. I wish I could assure you, Mr. Speaker, and the House that I can guarantee that this will happen every year. I fear that I cannot do that. All I can say is that, while this Administration are in office, we shall do our best to produce a better time for debate than has been the case in the past.
I should also like to reassure any hon. Member who may be worried that the debate is being held only a few weeks before authorities must fix their rates for 1982–83. Authorities have been given expenditure guidelines and provisional estimates of entitlement to the needs element of grant, as in previous years, but, provided that the House approves the order tonight, local authorities will receive the definitive circular only about five days later than they did last year. Little time has therefore been lost by postponing the debate. I believe that we have struck the right balance between having adequate time for debate at the right time of day and adequate notice to the local authorities concerned.
Like other right hon. and hon. Members I have received a copy of the letter that the Convention of Scottish Local Authorities has circulated to all hon. Members for the debate. I have read it carefully, as I am sure other hon. Members have. It makes a number of points and suggests lines along which the debate should go. I expect, therefore, quite fairly, to hear from Labour Members complaints that the Government are being impossibly hard in seeking to reduce local authority spending at all, or it may be that we shall be accused of not recognising the efforts that local authorities are making to economise in their spending, or indeed that the guidelines are unrealistic. I do not accept any of those charges.
For the time being, for the sake of this debate, let us put aside the idea of getting expenditure down to guidelines. Let us forget about guidelines and pretend that they do not exist. Let us look at the trend in the actual expenditure that local authorities have been incurring during the past three years against the background, by common consent, that the country has been going through an extremely difficult period of a major international recession, when the ability of many people and of many businesses to pay for all sorts of things has been declining severely.
Let us look at the trend in actual expenditure, which has nothing to do with guidelines or anything else. At constant prices, that is, allowing for inflation in all cases, expenditure for 1979–;80, the first of the three years, had increased by no less than 3.2 per cent. over 1978–79. So expenditure was increasing dramatically. This was

followed by a further increase of 1.6 per cent. in the next year, 1980–81. In 1981–82 expenditure planned by authorities, even after allowance is made for the reductions which were enforced by selective action imposed by the Government, showed an increase of 0.2 per cent. All of those figures, without exception, show increases in real terms after inflation has been allowed for.
We are dealing, therefore, in spite of all that has been said or may be said, and whether we criticise the assumptions made of the guidelines or anything else, with a situation in which there have been no reductions at all. It is generally accepted, I think even by Labour Members, that we are facing considerable economic difficulties.
The right hon. Member for Glasgow, Craigton (Mr. Millan) and his colleagues were also faced with considerable difficulties in their grant settlement in 1977–78. At that time the right hon. Gentleman urged authorities to exercise stringent control over expenditure levels and to avoid increases in the immediately following years. He had not achieved that by the time he left office. Since then he seems to have been persuading local authorities not to pay attention to requests to keep down increases in expenditure. The levels of expenditure that I am asking authorities to reduce are still considerably above the level about which the right hon. Member for Craigton was speaking when he was in office.
Labour Members and some local authorities have frequently made the suggestion that the Government have been asking for the impossible in the levels of expenditure proposed in the last two rate support grant settlements. I must ask the House to reject firmly any such view, for which there is no evidence.
A number of authorities, including, for instance, Eastwood, Kyle and Carrick and Midlothian district council, have managed to cut expenditure by substantially more than the 4.5 per cent. proposed by the Government over the two year period in our calculations. Other authorities, including, for example—these are only examples—ssDumfries and Galloway regional council, Grampian regional council and Glasgow district council, have made significant reductions, while falling short of the full cuts pressed upon them by the Government. So suggestions that the Government asked for impossible cuts are groundless, as proved by those examples.
It is a question of the will of the authorities as to whether they are successful. I hope that all authorities will proceed in 1982–83 to make the adjustment commended by the Government in the national economic interest. It would be an act of great irresponsibility for anyone to encourage authorities to adopt a contrary approach by continuing to plan for growth or to maintain unreasonable levels of expenditure to the danger of the national economy on the one hand and the extreme distress of many of their ratepayers on the other hand.
I should also refer to the experience of ratepayers over the past three years ending in 1981–82. All rates have increased substantially. That has been partly due to the inflationary difficulties that have afflicted the economy at large, but the key to modest rate levels is expenditure, and it is expenditure which, as I have said, has actually been increasing during all this period. There is, however, clear evidence that ratepayers can be protected from excessive rate increases if the right policies are pursued. I have in mind particularly Grampian regional council whose rate increase over the three years at 61 per cent. has been the lowest of all regional councils in Scotland. On the other


hand, no hon. Member will be surprised to hear that the authority showing the highest rate increase—at 155 per cent. —over the same period is Lothian regional council. This is an authority that has shown little regard for the difficulties of its domestic and non-domestic ratepayers. That is amply borne out by what has been said in public and what has been written to many hon. Members, including myself, over the last year.
I ask the House, therefore, to reject the view that swingeing rate increases are somehow inevitable or that they flow automatically from the terms of any rate support grant settlement, whoever makes it. The dominating factor in the experience of ratepayers and the increases that they suffer is the attitude of individual local authorities to spending policies. That is overwhelmingly borne out by what has been happening over the past few years.

Mr. J. Grimond: I accept the view that local authorities should economise, but I would ask the Secretary of State, first, what rate of inflation he assumed when he set these limits for local authorities, and secondly, how far he has taken into account the position of different local authorities. My local authority in Shetland is in a rural area experiencing great difficulty and is rather peculiar in Scotland. Is that taken into consideration adequately in his proposals?

Mr. Younger: I appreciate the point made by the right hon. Gentleman. Taking the second half of his question first, I know that in Shetland circumstances have been exceptional over the last few years. It is impossible to fit that authority into a normal pattern. Yes, it gets considerable help and assistance in many ways in the rate support grant settlement. This reflects, as best it can, the peculiar circumstances of Shetland. On inflation factors, as the right hon. Gentleman will know, we have made clear the figures that we allow, which are basically 4 per cent. for the wages component and 9 per cent. for the prices component. Those are the figures that are allowed in the rate support grant settlement and that are notified to local authorities.

Mr. Grimond: Surely the Government themselves have been endorsing wage settlements under their own control far above 4 per cent.

Mr. Younger: Of course, these are averages, as the right hon. Gentleman will appreciate. Some people will find themselves getting increases above the average, some below the average and some on the average. That is the way it works. May I add one thing. If it is the experience, as indeed it is, of local authorities that some of the calculations made for inflation cannot be applied directly to individual transactions, that is exactly the same position that all private firms and businesses are in every year. They must make an assessment. If the assessment turns out to be wrong, they must make reductions in their spending to compensate. There is nothing new about that, except for local authorities, which in the past have been insulated from those pressures to a great extent, as has central Government.
There is widespread speculation about rate levels in 1982–83. Decisions have still to be taken by authorities, but it seems likely that the pattern will differ from that in recent years. I have seen reports, for example, that the Lothian increase may be very low and that in other regions the increase will be a good deal higher. If that proves to

be true it will be extremely interesting, because it will go to show how directly and clearly helpful were the actions that I took in 1981–82 to reduce the expenditure level of Lothian region. Indeed, in 1982–83, if it turns out to be true—we do not yet know—Lothian ratepayers will see a direct and indentifiable benefit. The message, which is clearly underlined, is that the level of expenditure is the main determining matter.

Mr. Gordon Wilson: Does the Secretary of State accept that there is a converse of that? If Lothian region is limited by the Government's policies, how does the right hon. Gentleman describe the position of Tayside and Grampian regions, which voluntarily cut their costs below the level that most people would accept, were thanked by the Government for so doing, but now must face extraordinarily large rate increases?

Mr. Younger: Lothian has so far not done what I said might happen. One hopes that it may, but that has still to be proved.
I am coming to the effect on other authorities, which is a very important matter. The trend of expenditure over a number of years shows a clear message coming out of the conduct of authorities. Tayside is a very good example of an authority that has tried very hard and has been quite successful.

Mr. Gavin Strang: The right hon. Gentleman has now referred twice at considerable length to the position of Lothian region, a region to which lie is opposed because it provides a high level of service, particularly in education. Great concern is felt in Lothian at present, extending beyond the Labour movement, that even if the regional council fixed an increase in rates 'well below the average increase this year for all the Scottish regions the Scottish Office might still penalise it, as it did last year, by retrospectively deducting a sum of money from central Government support. Can the Secretary of State give us an assurance that he will not pursue the sort of vendetta that some of us fear, particularly if our rate increase is much lower than increases elsewhere?

Mr. Younger: Most of that intervention was not correct. I have no objection to Lothian regional council providing services as best it can. What I object to is its expenditure being excessive. Calculations that one can make from outside suggest to me that the council should be thinking about making a rates reduction, because £30 million was taken off its expenditure last year. If it did that, there would be no effect either way on what I did or did not do with regard to imposing a grant penalty on the council this year.
I very much hope that I shall not even have to contemplate such a thing. If I did, I would not impose the penalty unless I presented an order to the House and the House approved it, which it would do only if the council could be demonstrated to be incurring excessive and unreasonable expenditure. I very much hope that I shall not have to contemplate any such action against any local authority, including Lothian region, and that the hon. Gentleman will agree with me about that, anyway.

Mr. Dennis Canavan: The right hon. Gentleman must be aware that his right hon. Friend the mace bearer of the Tory Party, the Secretary of State for the Environment, has ditched the proposals to cut any local authority's rate support grant during the course of the


financial year. Will the Secretary of State for Scotland follow suit, instead of doing what he did last year to the likes of Lothian, Stirling, Dundee and Renfrew? It would be very unfair if the Government adopted punitive measures against Scottish local authorities when that action cannot be copied south of the border.

Mr. Younger: The English system of local government finance is totally different. It does not apply in the way that the hon. Gentleman said. Even if it did, I, unlike him, would not automatically follow whatever the English did. I run the matter according to Scottish needs and in the Scottish manner. I thought that that was the best way.

Mr. Michael Ancram: My right hon. Friend told the House that he hoped that there would be only a small percentage rise in the Lothian rates this year. Does he accept that, because the rates have gone up by one and a half times over the past three years, it will be a small percentage—if it happens—of a much larger amount than most ratepayers are being asked to bear in other parts of Scotland?

Mr. Younger: I agree with my hon. Friend. The level of rates is just as important as the increase or decrease. My hon. Friend is right about that very important point. If there is a decrease in Lothian, I hope that it will at least show what the effects of expenditure are. Lothian's level of expenditure is an important matter, because the rate poundage this year, at 112p, is the highest of any region. It contrasts with Strathclyde and Highland regions' 80p and Grampian's 66p. The point that I am making is that the actual rate poundage levels as well as the percentage increases must be seen together in order to understand the effect on individual ratepayers.
The year 1980–81 was the first full year in which authorities had the opportunity to respond to the necessity for expenditure restraint. Regrettably, their expenditure in that year was nearly £70 million more than was allowed for in the rate support grant settlement, despite assurances that I received from the Convention of Scottish Local Authorities that the excess would in the outturn be much lower than that. I took CoSLA at its word. I accepted its calculations, and on the basis of its assurances decided not to impose a reduction in grant within that financial year, which—the hon. Member for West Stirlingshire (Mr. Canavan) will be interested to know—was something that the English did then. I did not, because CoSLA advised me that it probably would not be necessary.
That was a mistake. I should not have listened to what the convention said. I should not have taken its advice, because in the outturn the overspend was just as large as it had originally looked as if it would be. Therefore, I must now remove grant from the authorities to a total of £50 million, against an overspend of £70 million.
I know that that decision has caused concern among local authorities, but I believe that the House will accept that it would hardly be right for them to be exempt from a grant penalty similar to one imposed elsewhere simply because they made an inaccurate forecast of their expenditure. That would not be fair to anyone.
Local authority budgets in 1981–82 indicated that the authorities were planning to spend no less than £180 million above the Government's planning figure—no

small amount. I informed the House last June that I proposed—with considerable moderation, I thought—to withhold only £100 million of grant, as against the £180 million overspend. The convention made representations to me, to which I listened very carefully, and in the event I announced last December that I would withhold only £58 million.
Thanks to the action that I took under the Local Government (Miscellaneous Provisions) (Scotland) Act 1981, £31 million of that total is being withheld selectively from certain authorities which planned particularly high levels of expenditure, leaving £27 million to be withheld across the board. That amount, difficult though it no doubt is for some authorities, is a small proportion of the original overspend of £180 million. I do not think that anyone, given the circumstances, could regard that as being in any way unreasonable.
I make no secret of the fact that the convention and a number of individual authorities have expressed serious concern about the distribution of these overall grant penalties through the grant distribution formula embodied in the relevant rate support grant order. I accept that there is an element of rough justice in that approach because the scale of the individual grant reduction cannot be precisely related to the level of planned expenditure. An overall grant penalty has to be imposed in one way or another. The right hon. Member for Craigton, in 1977, and I, in the proposals at present before the House, have chosen to do this on the basis of the established distribution formula. If authorities generally, and hon. Gentlemen do not like this, they should accept the responsibility for identifying some preferred alternative course. There is no alternative under present legislation to distributing a general grant reduction through the distribution formula, but I would be very willing to consider any proposals made in the course of the debate, or at any other time, or put to me by authorities, to adopt a different approach that commanded wide support.
One possible alternative would be to distribute the amount of grant withheld pro rata to the excess shown by individual budgets over the authority's guideline. Authorities may well argue that this would place undue weight on guideline figures which hitherto have been. treated as no more than indicative, but authorities cannot have it both ways, and I am very open to suggestions on this from hon. Members or from CoSLA.

Mr. Robert Maclennan: If the right hon. Gentleman is prepared to admit, and has admitted, that the arrangement is inequitable, why has he not brought proposals before the House about how to deal with this inequity? He has not shown himself slow to bring legislation before the House to deal with other matters affecting local government finance and the House has been asked to act very quickly, and no doubt it could do so again.

Mr. Younger: The hon. Gentleman ought perhaps to have thought that through before he said it because this Government have done something about this at long last. I believe that the hon. Gentleman—;I am not sure which party he was in at the time—voted against the only effort that has been made to do something about it. The effect of the 1981 Act was greatly to lessen this admittedly unfortunate effect of the across—the—board reduction working unfairly against individual authorities. So to that


extent I have moved in the direction of the hon. Gentleman and I am sorry that he did not feel able to support this in the House.
I turn now to the issue of manpower. Staffing levels and expenditure are inseparable and reductions in the latter cannot be achieved without saving in staff costs, which account for nearly 70 per cent. of total local authority current expenditure. Many local authorities protest that they are anxious to contain expenditure, yet they have avoided committing themselves to a systematic attempt to reduce staffing levels. I know this in not easy, but it is not easy either for ratepayers to pay the wages of employees who may be surplus to requirements.
Of course some authorities have tried hard and conscientiously to cut out extravagance, to seek value for money and especially to contain and reduce manpower. I recognise that and I commend those authorities. Ratepayers will be better able to judge their authorities' performance under the new Joint Manpower Watch arrangement, which publishes manpower details for individual authorities as well as total figures for different groups. This was done for the first time last month when the figures for September 1981 were published.
That was almost the only heartening thing about the 1981 figures. It is true that the numbers have begun to drop and that this is a step in the right direction, but a great deal more needs to be done. As a whole, local authorities are still employing about 11,000, or nearly 5 per cent., more people than they did in December 1977. Moreover, the small reductions achieved in the past year are almost entirely a product of significant reductions in the number of teachers and lecturers, because of falling school rolls, and in the number of manual workers, which fell by 3 per cent. during the year. The number of other staff actually increased by about 1 per cent. over the year from September 1980 to 1981.
By contrast, in England, south of the border—so beloved of the hon. Member for West Stirlingshire—reductions have not been speedy but they have been steady and the total employed has fallen almost every quarter since we took office. I am not asking local authorities to do something that I am not doing in the Scottish Office. Since we took office, the staff of the Scottish Office has fallen from 11,156 at 1 May 1979 to 10,545 at 1 February this year. When account is taken of the transfer of staff to and from other Departments, which produces a net addition to the Scottish Office of over 100, the total reduction is about 700 staff, or about 6 per cent. This reduction has been achieved despite the fact that the staff of the prison service and the State hospital has been allowed to grow by about 180, these areas being exempt from staffing reductions.
In effect, this means that the rest of the Scottish Office has already lost over 10 per cent. of its staff, and further reductions are planned. By 1 April 1983 the reduction in the Scottish Office, including on this occasion the prison service and the State hospital, will be just under 9 per cent. So no one can say that I am preaching to others what I do not myself practise. Until local authorities begin to tackle positively the problems of reducing the pay roll they cannot hope to reduce expenditure. The policy in many areas of maintaining employment at all costs inevitably means that the amount of money available for expenditure on services and items other than staff salaries, not to mention the ratepayers, gets squeezed disproportionately.
As I told the House a moment ago, Scottish local authorities are employing nearly 5 per cent. more staff than they did in 1977. It would be a telling criticism of my request to them to get back to lower staffing levels if we could say that there was such an abysmally low standard of service in 1977 under the Labour Party that it was unacceptable. Nobody can honestly say that. Of course the level of services provided in 1977 was not unacceptably low. Surely authorities could return at least to those manning levels or something near them without the catastrophe that some are so ready to predict. I do not accept the argument that local authorities have had to increase their staff solely to cope with new statutory duties. Substantial discretion is given to authorities in the discharge of their statutory functions, most of which rests not on recent legislation but on statutes dating from well before local government reorganisation. Yet numbers have increased by about 100,000 staff, or 50 per cent. over the last 10–15 years within more or less the same statutory framework.
I turn now to my proposals for expenditure arid grant for 1982–83. I begin by drawing to the attention of the House a fundamental change in the basis of determining the expenditure figure for grant purposes. In previous RSG settlements grant was initially calculated on an expenditure figure expressed: in terms of prices prevailing in the November prior to the grant year. It was then the practice to make available additional grant, subject to a predetermined cash limit, on cost and price changes occurring after November.
My right hon. and learned Friend the Chancellor of the Exchequer announced in his Budget speech on 10 March 1981 that from 1982–83 the Government would conduct their expenditure plans on the basis of cash instead of volume. As a result, the relevant expenditure figure for grant purposes has been assessed on the basis of 1982–83 cash prices using the principal assumptions that pay awards will average 4 per cent. and prices will increase on average by 9 per cent. between 1981–82 and 1982–83. Thus the order for which I am seeking approval provides for a total figure of grant that will be increased only in the event of a rise in interest rates affecting loan charges. The concept of a main order followed by an increase order will no longer apply. Local authorities have been given full notice of the Government's intentions and it has been made clear to them that they must make their spending plans accordingly.
This discipline that I am asking authorities to accept is one long familiar to the private sector of the economy and to every private individual in daily life. In framing their budgets they should plan for a prudent level of expenditure in cash terms and then ensure that the costs of the services that they provide are kept within that cash figure. 1 accept that this is not easy because it implies that in particular circumstances some reduction might have to be made in some elements of the service if money runs out. Nevertheless, I ask the House to accept that the difficulties will be much less than those which arose from the previous approach, under which local government sought to maintain a predetermined standard of service irrespective of the scale of cost increases affecting local government expenditure.
I urge local authorities, therefore, to plan for expenditure in conformity with the assumptions made in the settlement. Current expenditure guidelines have been issued to all authorities as an aid to sensible budgeting in


line with the settlement and they allow for an adequate standard of service, but the target I have set will mean significant reductions in the level of expenditure that authorities have planned for the current year. Any authority that has failed to exercise reasonable restraint in the current financial year will inevitably face a more difficult task in reducing expenditure in 1982–83.

Mr. Bruce Millan: What will the average reduction next year have to be compared with the current year's budget?

Mr. Younger: We shall consider that when the time comes, but at this stage we are not forecasting what will happen. However, we know what the forecasts are and the figures with which we shall have to deal.
Setting priorities within local circumstances is one of the main tasks of local government. Exactly the same problem must be met in placing any public expenditure programme. We must find ways of protecting those things that are essential in priority and use the money available to concentrate on them. If authorities plan for expenditure significantly above the levels commended to them in the grant settlement I shall not hesitate to use the full range of statutory powers available to me. We took resolute and effective action last year. If necessary, that can be repeated, but I very much hope—I am sure it is the hope of everyone—that it will not have to be.
The rate of grant for 1982–83 is 64.2 per cent. —2–5 percentage points lower than for 1981–82. The effect of this reduction on rate-borne expenditure will be the same as the effect of the 3.1 per cent. reduction to be made in England. I have no doubt that hon. Members will complain about this reduction, but I remind them that the right hon. Member for Craigton and those who supported him did very much the same thing in 1977–78, when the grant was cut by no less than 4 percentage points—from 72.5 per cent. to 68.5 per cent. That was at the time of the 1977–78 grant settlement.
In an article he wrote in The Scotsman not long ago, the right hon. Gentleman told us that he thought a legitimate weapon for the Government to use in persuading local authorities to reduce spending was a reduction in the rate of grant. He was right to say that, having done it himself. In case it is suggested, as I think the right hon. Gentleman did on the last occasion, that this was a technicality and was not to do with reduced expenditure—he said in the House that it was to do with local government reform—I have with me the report on the rate support grant order for 1976. That document was produced by the right hon. Gentleman, and in paragraph 19 on page 7 he makes his position quite clear. It states:
Local authorities have been advised by Circular that it was the intention of the Secretary of State to reinforce the Government's public expenditure policy by reducing in real terms the financial resources which local authorities would receive from the Government in 1977–78 by setting the percentage of relevant expenditure for that year below that for 1976–77".
That was below by 4 per cent. Therefore, do not let us have any more complaints about the reduction in the rate of grant—a perfectly legitimate thing to do. Labour Members will have their work cut out if they want to make anything of that.
I propose to change the arrangements for the distribution of grant in only minor respects from those

adopted in earlier years. The domestic rate reduction will remain at 3p in the pound, and the scheme for special assistance to authorities affected by oil developments will continue with payment of £ 17 million in respect of an initial calculation for 1982–83 and a further calculation for 1978–79. The amount of resources element will be increased by about a quarter, and that goes some way to meet the views of the convention in order to improve the equalisation of local rating resources.
Needs element of £3.9 million will be distributed among regional and islands councils in accordance with the incidence of youth unemployment in their areas. This is to enable them to enrol more 16-to-18-year-old students in full-time vocational further education courses. The general portion of the needs element—by far the largest part of the grant—will be distributed on the population formula prescribed in schedules 3 to 5 to the order.
The additional assistance for Islands areas is also continued. For the first time, I have thought it right to take some account of the widely differing circumstances in the Western Isles on the one hand and Shetland and Orkney on the other. I am aware of the problems created for the northern isles by oil developments, but these have resulted in local rating resources in excess of those available to other authorities.
Grant support to Orkney and Shetland will therefore be slightly lower than in previous years—for Shetland, £397 per head and for Orkney, £388 per head. These figures are well above the average figure of £320 per head for regions inclusive of districts. I have provided for an increase of about £13 per head to the Western Isles in recognition of its problems.
Let me summarise the main points. First, if the House approves the order, local authorities are being provided with resources from the Government that will enable them to maintain services at an adequate level, but they must reduce their expenditure as a whole. Some have proved that they can do so. Others can now do so and I hope that they will.
Secondly, I hope that they will heed the advice that I have given them since 1979 to reduce their staffing levels, which are still much higher than they ought to be. I am not asking them to do anything that private industry, other local authorities and the Scottish Office are not having to do.
Thirdly, by importing the principles of cash planning, this grant settlement invites authorities to recognise, and take account of, the economic reality and discipline that the private and public sectors must observe, do observe and have observed for years.
Fourthly, ratepayers, whether domestic, industrial or commercial, must recognise that the Government's firm intention is to help them by encouraging local authorities to reverse the trend of expenditure which, as I have demonstrated, has been ever upwards in recent years. As a result of that, local authorities must moderate increases in rates, which it is clearly demonstrated follow reductions in expenditure.
On those bases I commend the order for approval by the House. It is in the interests of every ratepayer in Scotland that local authorities should pay close heed to the need to reduce their expenditure accordingly.

Mr. Bruce Millan: I begin by saying something agreeable, after which I shall say very


little that is agreeable. I acknowledge the help given by the Government so that we could have this debate at this time. The same can be said of the housing support grant debate that will take place later today. I hope that by mutual agreement we shall be able to divide the time so that we may have a reasonable debate on each of these important subjects. If this arrangement works satisfactorily, I hope that it will become the pattern for the future. It is a welcome change, and at least on that score the Government deserve our thanks.
I am afraid that the Government do not deserve our thanks on anything else. This debate is being held against a background of local authority bitterness and anger about the way in which they have been treated by the Government. That treatment is unknown in local government—central Government relationships in Scotland. Anyone present at the meeting that Labour Members had this morning with a deputation from CoSLA can affirm and attest that there is considerable anger amoung local authorities, even among traditional Government supporters, about the way in which they have been treated. That anger is not just about the merits of the order but about the fact that under this Government negotiations have become an absolute farce.
As one of the representatives said this morning, "The Government pronounce what they will do and there are no genuine negotiations at all". Indeed, the main elements of the order were announced on 2 December, on the day of the public expenditure statement by the Chancellor of the Exchequer in the House, a full fortnight before the meeting with the local authorities that was meant to settle these matters.
Let us be under no misapprehension. There is considerable concern among local authorities about the way in which they have been treated by the Government. It is no exaggeration to say that there is a crisis of confidence.
The two questions that ratepayers ask about rate support grant settlements, without going into the technicalities, as I shall inevitably have to do in a minute, are, how much will their rates go up in 1982–83, and who is responsible for the increases that they shall have to pay? The answer to the first question is that the rates will go up considerably. I shall later say something about what I think the figure will be, unlike the Secretary of State, who is always apprehensive about giving an estimate or any information. Secondly, the reason for the increases will lie fairly and squarely on the Government and not on the local authorities, which, by and large, have tried manfully, in the difficult circumstances of recent years, to behave responsibly towards their ratepayers, and to act with regard to the national economic situation.
I want, as I have done in earlier debates on RSG orders, to run through the various elements which will contribute to the considerable increase in rates that we shall have in 1982–83. The Government have repeatedly said that I was scaremongering, and that the increases would be modest. The estimates that I have given have always been on the low side and I do not intend to exaggerate today because the position is disastrous enough for both local authorities and their unfortunate ratepayers.
Ratepayers will have to pay a penalty for 1980–81. The Secretary of State for Scotland explained to us today why he is imposing that penalty. He said that in 1980–81 there was excessive expenditure of £70 million—that is, excessive in terms of the Secretary of State's assessment

of what is excessive. Some of us do not accept that it is excessive at all. What he did not say was that CoSLA has produced, in the document that has come to the Opposition and to the Secretary of State, reasons why some of that socalled excess was not because of extravagance by local authorities but for legitimate reasons. Whether or not these reasons are valid, the Secretary of State, neither today nor in his negotiations with the local authorities, has attempted to answer the points made by CoSLA about the so-called excessive expenditure in 1980–81.
CoSLA demonstrated, to its own satisfaction and to the satisfaction of many Labour Members, that the real so—called excess is much more likely to be £35 million than £70 million. That is a matter for argument, but we have not heard any argument from the Secretary of State, who simply said that no attention should be paid to CoSLA representations and that the Government have said that the excess was £70 million, of which £50 million will be imposed as a penalty.
It does not matter how the £50 million is distributed. It can be done over three years, as the Secretary of State is doing, but apart from the whole process being objectionable in principle—we object in principle to this kind of retrospective adjustment—the whole of that £50 million will fall on the Scottish ratepayer in 1982–83 and will add to the considerable rate increases in that year.
There is also the question of 1981–82 and the penalty that is being imposed on the local authorities for the current financial year. The Secretary of State has fairly pointed out that some of that penalty has been imposed as an individual penalty on particular local authorities such as Lothian. However, we remember that when the Bill was passing through the House, giving power to the Secretary of State to do that, one of the great arguments for the power was that all the good authorities—good according to the Secretary of State—would not have to worry because they would not be punished in any way.
However, a £27 million penalty for 1981–82 is being imposed on every local authority in Scotland whether or not it has met the Government's so—called guidelines. [Interruption.] The £27 million will be imposed as a general penalty on local authorities in Scotland, despite the Secretary of State's boast. [Interruption.] I shall come to the six authorities a little later.

Mr. Grimond: I noticed that when the right hon. Gentleman said that the £27 million was being inflicted on local authorities whether or not they abided by the Government guidelines, the Secretary of State— [Interruption.] The Secretary of State is now shaking his head, but he was nodding before. I understand than this is an across—the—board penalty, regardless of whether the local authorities in question exceeded the expenditure guidelines.

Mr. Millan: I was coming to the effect of the guidelines in the current year. The Secretary of State told us that they were realistic—but they were so realistic that 59 out of 65 local authorities in Scotland budgeted well in excess of them. Admittedly the other six had a refund made to them, so they will not suffer the penalty. The refund is of £700,000 out of a penalty of £27 million. [Interruption.]>The Secretary of State is now agreeing with me.
Local authorities have attempted to meet the Secretary of State's wishes but have not been able to do so because


the figures were unrealistic. They are being penalised by the £27 million penalty, which is a general penalty for local authorities in Scotland. We have objected to that in principle, but, apart from that, that penalty will go straight on the rates for 1982–83. That is another element in the large increases which ratepayers in Scotland will be paying in 1982–83.
There is another exceptional item which I shall mention for the sake of completeness. Because of industrial valuation appeals in Fife, local authorities will be faced with repayments of rates of about £24.7 million in the current year. In those circumstances, there is a case for the Government to make some rates contribution or take account of the reduction in rates. The Government have refused, just as they have refused so far—and this will interest the right hon. Member for Orkney and Shetland (Mr. Grimond)—to give a pledge that when there are reductions in rates arising from clause 3 of the Bill going through the House at the moment because of the change in valuation proceedings and oil installations they will make a contribution to local authorities for these items.
We have been told by the Government that it is extremely unlikely that they will make a contribution. In any case, we shall have to wait and see, although with no great optimism. However the £24.7 million will fall on the ratepayers in 1982–83, with the Government making no contribution. That is another part of the burden that will fall on the ratepayers and contribute to the large increases that we shall have in 1982–83. Presumably that cannot be blamed on local authority extravagance. A valuation appeal which goes against a local authority, whatever else it is, is not extravagance. However, the ratepayers will pay.
When we come to 1982–83 and the settlement with which we are concerned, we see the enormity of what will happen to ratepayers in Scotland. There are a number of elements in this. First, local authorities, like everybody else, are affected by the inflation rates, which are higher than the Government were originally estimating, and higher than was being provided for in the order. Secondly, there is the cut in grants from 66.7 per cent. to 64.2 per cent., a reduction of 2½ per cent. The Government cannot pretend that that does not have an effect on ratepayers.

Mr. Younger: What about the 4 per cent?

Mr. Millan: I will come to the 4 per cent. in a minute.
One thing about the Secretary of State is that he is predictable. If he includes what he thinks is a good point in his speech in one year, he repeats it every year thereafter.

Mr. George Foulkes: The Secretary of State is short of civil servants.

Mr. Millan: Having listened to the Secretary of State today, I can say that if he wants to make further reductions in the Civil Service in Scotland he should sack his speech writer. The 2.5 per cent. cut in grants means about 8 per cent. on rates. I do not think that the Secretary of State will question that figure.
The grant was reduced by 4 per cent. in 1977–78, but the Secretary of State always forgets to tell us of the background to that reduction and what happened in the years before. In 1974–75, the last year for which the then

Tory Government were responsible, the rate of grant was 68 per cent. The Labout Government, who were elected in 1974, increased the rate of grant for the next two years by no fewer than seven points, from 68 per cent. to 75 per cent. In the following year it was 74 per cent. The increase was related to the special expenses being borne by local authorities during reorganisation. For that reason among others the 4 per cent. reduction was made in 1977–78. It was made, in any case, against a background of increased expenditure, in real terms; of no less than 20 per cent. by local authorities over the previous two years. That is entirely different from the present situation. Obviously no Government could have allowed it to continue.

Mr. Younger: How does the right hon. Gentleman's remark square with his own words when he said that the change in grant was the result of
the intention of the Secretary of State"—
that was the right hon, Member for Glasgow, Craigton (Mr. Millan)—
to reinforce the Government's public expenditure policy by reducing in real terms the financial resources which local authorities would receive from the Government".
That was his own explanation.

Mr. Millan: I have just said that. In the two years prior to 1977–78, expenditure by local authorities on revenue account increased in real terms by 20 per cent. That situation could not be allowed to continue under any Government. I stand by what happened then. Even when the figure was reduced by 4 per cent., it was, in equivalent terms, still 2 per cent. higher than it has been under the Tory Government in 1973–74 and 1974–75.
I turn now from the cut in grant which will add to the burden on ratepayers in 1982–83 to the relevant expenditure on which grant has been calculated. The Secretary of State gave the impression this afternoon that the relevant expenditure on which the Government are paying grant is perfectly reasonable. It is easy for local authorities, he suggested, to reduce their expenditure to the level for which the Secretary of State is asking. However, when I asked him what that meant in reductions compared with the budgets and the likely outturn in the current year, he said that we must wait and see. He said that we would know about it later.
We can know about it now. All the facts are on the record. Of course, we do not hear such interesting pieces of information from the Secretary of State. The figures come from CoSLA. If the figures are wrong, the Secretary of State will no doubt correct them. CoSLA has calculated what it will need in 1982–83 if its budgets are frozen at the 1981–82 level, if it takes account of real increases in inflation up to November 1981 and if, from November 1981 to the end of 1982–83, it acts on the Government's wholly unrealistic inflation assumptions of 4 per cent. for wages and 9 per cent. for other expenditure.
Even acting on those assumptions, CoSLA calculates—I believe accurately—that standstill budgets in 1982–83 would require budgets which are 6.3 per cent. higher than the cash limit which the Secretary of State is setting down for 1982–83 and on which he is paying rate support grant. It is nonsense for the Secretary of State to claim that local authorities can get down to the budget figures on which he is paying grant in 1982–83. Even if there was a freeze, and even using these unrealistic inflation figures it would mean budgets 6.3 per cent. higher than those for which the Secretary of State has provided.
The Secretary of State did not answer my question this afternoon. I am not sure whether he does not know the answer or whether he simply chooses, for his own reasons, not to answer. I asked the same question on the Second Reading of the Local Government and Planning (Scotland) Bill on 7 December. The right hon. Gentleman said that hon. Members would have to wait for this debate to hear the answer. However, this afternoon he did not give the answer. He always claims that he is doing well for Scotland compared with what is achieved by his English colleagues south of the border. The figure given by the Secretary of State for the Environment for the real reduction in expenditure that he expects in 1982–83 to get down to his figures was not 6.3 per cent., but, on the basis that I have quoted, only 4 per cent. The Secretary of State for Scotland is therefore asking for a bigger reduction in local authority expenditure in 1982–83 than is being requested of local authorities in England, which will not reach the figures either.
It is nonsense and hypocrisy to pretend that local authorities in Scotland can get down to these cash figures in 1982–83. The Secretary of State knows very well that this will not happen. He also knows that the additional burden that then arises will be borne by the ratepayers. It will be added to the large increases to which I have already referred for 1982–83.
Only six out of 65 authorities have come within the guidelines for the current year, 1981–82, that, according to the Secretary of State were so realistic. The other 59 budgeted for more and, in some cases, considerably more. Now that the guidelines are available for 1982–83, there is not a chance that anything like a majority or, for that matter, even a small number of local authorities in Scotland will be able to meet those guidelines. I forecast now that the guidelines will be breached by virtually every local authority in Scotland. The guidelines are no longer an indicator to local authorities. The Secretary of State is using them as the basis on which he imposes penalties on individual local authorities. At the same time, he refuses to give local authorities full information on how the guidlines are made up.
The local authorities have asked for figures showing how the individual guidelines of particular authorities, service by service, are made up. The figures must be available in the Scottish Office. If there is a wish for open government, why cannot they be supplied to local authorities? It would be an incentive to them. They would know what they have to do to meet the Secretary of State's wishes.
Whether or not he gives the information, the fact is that the Secretary of State is using the guidelines in a mandatory way. Yet he knows, as does the Under-Secretary of State, that there is not a chance of local authorities being able to get expenditure down to the level of these guidelines even if inflation turns out to be what the Secretary of State estimates. It is nonsense. To allow 4 per cent. for wages and salaries and 9 per cent. for other services would mean an average rate of inflation of 5½ per cent. a year. Even the most optimistic Government supporter does not believe that the average rate of inflation will come down to 5 or 5½ per cent. a year for local authorities in 1982–83.
The figure has already been exploded. The manual workers' settlement will already have cost local authorities £13 million in the current year in excess of the 4 per cent. provision. Expenditure relating to the police and firemen

and a whole range of other services, including the teachers, have still to come. The Government know that they will not achieve the inflation figure for 1982–83 for which the order provides.
There is nothing unusual about this situation. It happened last year. The Government provided what they called realistic figures for inflation. The Opposition argued that these would not be achieved. What was the outcome? In 1981–82, the current year, the Secretary of State provided for average inflation figures on Government assumptions of 7.3 per cent. This would have meant total inflation expenditure of £150 million. We are talking not about speculation but about what has happened this year. The inflation rate has been not 7.3 per cent. but 10.5 per cent. The total expenditure has been not £1:50 million but £225 million. All that additional expenditure falls on the ratepayers and the Government do not pay their part.
It is no wonder that the local authorities do not trust the Secretary of State or that they are bitter about the way in which they have been treated, because it was known when the figures were put forward in last year's orders that they are phoney, just as we know that this year's figures are equally phoney and a confidence trick played on the local authorities. More importantly, they are an attempted confidence trick on the Scottish ratepayers, who must pick up the tab.
The result is that there will be a considerable increase in rates in 1982–83. The position is more uncertain this year than before because of the way in which the Government have changed the basis for the settlement. However, I should be astonished if the overall increase lin rates in 1982–83 is not over 20 per cent. or 25 per cent. I stand by that figure. That will be added to increases during the past two years, under a Government who always say how concerned they are about the ratepayers, of no less than 32 per cent. and 36 per cent. successively. If we have another 20 per cent. or 25 per cent. on top of that, it will mean that Scottish rates will have more than doubled under the munificence of a Government who profess to have concern for the ratepayers.
Even the good boys, about whom the Secretary of State is always talking, are in difficulties. As we saw in the newspapers recently, Grampian regional authority forecasts a 21 per cent. increase. The Secretary of State also mentioned Eastwood. I wish that he had heard what the representative of Eastwood district council said about the Scottish Office at our meeting with CoSLA this morning. If he believes that he has a friend in Eastwood, he could not be more mistaken. Although it is a good Conservative authority, it, like every other authority in Scotland, is being treated badly by the Government. We shall have major increases in rates next year and poorer services.
It is especially offensive that, at a time when there are 347,000 people unemployed in Scotland, the Secretary of State comes to the House and boasts about how he has forced local authorities to put more people on the dole. That is what he is attempting to do.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): Will the right hon. Gentleman give way?

Mr. Millan: The Under-Secretary of State will have plenty of time to make his speech later. The Secretary of State took about 40 minutes to make his speech. I do not wish to do the same.
Of course the ratepayers will suffer in 1982–83, as they have suffered during the past two years under the Government. Opposition Members have every sympathy with them and with the industrial ratepayers. The Government have been clobbering industry, because the 347,000 unemployed represent industries and factories that have closed down or that are on the brink of bankruptcy. They are suffering from the Government's high rate policy, just as the domestic ratepayers are suffering. However, they should take their complaints not to the unfortunate local authorities but to the man responsible—the Secretary of State for Scotland. Because he has let down the local authorities and ratepayers, and has penalised every ratepayer in Scotland, we shall vote against the order tonight.

Sir Hector Monro: We have rarely seen a horse running more true to form then we have witnessed in the past half—hour. The right hon. Member for Glasgow, Craigton (Mr. Millan) seemed to tell the House that when he was Secretary of State in the late 1970s everything was sweetness and light and that the rate support grant order went through without argument. I seem to remember furious and critical debates on the rate support grant and the right hon. Gentleman's parsimonious attitude to local authorities. I am surprised that he can trump up such an approach this afternoon. I know that he has been boosted by all sorts of lobbies this morning. He had to make a show of listening to them and accepting everything that they said, but it is sad that a man of his standing in the House. should be so critical when he has no reason to be so.
The restriction of public expenditure by Government, local authorities and nationalised industries is right. It is the key, coupled with reasonable wage awards, to the reduction of inflation and the road back to better employment figures. There is no Government money and no local authority money. The money about which we are talking comes from the taxpayers and the ratepayers. Therefore, we have every right to expect a high standard of housekeeping and prudent expenditure, which is efficiently and economically carried out. Of course the ratepayers are hard pushed. They have high bills for heat, light and power and when the rate demands arrive they say that enough is enough. The rates are a severe burden on shopkeepers, small businesses and on every individual.

Mr. John Home Robertson: Why cut the rate support grant?

Sir Hector Monro: The hon. Member for Berwick and East Lothian (Mr. Home Robertson) is the most frequent sedentary interrupter that I have ever known. We look forward to hearing something constructive from him later in the debate, but I must not be over-optimistic.

Mr. Home Robertson: If the hon. Gentleman does not like sedentary interruptions, perhaps he will listen to the point that I made. If he is not in favour of rates increases, why does he support the Secretary of State in cutting the rate support grant? He cannot have it both ways.

Sir Hector Monro: I would have thought that the hon. Gentleman came to the debate to listen to the arguments. So far I have not said anything about the rate support grant.
We sympathise with local councillors. I was one for 15 years and I know the extreme difficulty of balancing the books in the light of the rate support grant. I know how frustrating it is to have to put to one side plans that one has envisaged being fulfilled by now and realising that it is not the correct policy in terms of public expenditure. However, the Government should react to the ratepayers in trying to bring home to the spendthrift authorities, which do not include Dumfries and Galloway, the necessity of keeping expenditure under control. The ratepayers have every right to be incensed about high—spending local authorities.
Opponents of my party speak about Government cuts, often in press headlines. Government expenditure is higher in real terms today than ever before and no cut has been made, even allowing for inflation. The cuts about which we talk are cuts in projected expenditure that were optimistic when they were forecast and prepared some years ago. The Secretary of State set a target of bringing back expenditure to 1978 figures, in real terms but said that he and those of us who believe in reducing public expenditure, did not believe we had achieved it. Every year since 1978 more and more has been spent by local authorities.
As my right hon. Friend said, the Government have set a fine example of manpower. The Scottish Office has made a substantial reduction in its staff. In the areas where reductions have been made, they have been as high as 10 per cent. since June 1979. However, local authorities have increased their staff. I accept that during that period and for longer beforehand they have had some additional responsibility.
It is right that the figures should be emphasised time and again. The figures for full—time equivalents show that in June 1978 248,000 people were employed by local authorities; in June 1979, there were 256,000; in June 1980 there were 260,000 and in June 1981 there were 260,000. I am glad to hear that there was a slight reduction in those figures by September last year. Basically, over that period the number of local authority full time equivalent employees had increased by 12,000. Even the figures in the good authorities have remained static.
The Government have every right to praise authorities that have kept within the guidelines—I am glad that they have done so—and to repay the clawback where that is appropriate. I am glad that my area has benefited from that. In 1981–82 Dumfries and Galloway was paid back £589,000. Nithsdale and Annandale and Eskdale received a windfall of £130,000 and £110,000 respectively. That is good news for local authorities which try to keep within the Secretary of State's guidelines. I hope that he will receive more thanks from them than he has had so far in public.
The rate support grant order is the most complicated formula ever devised to give equality of Exchequer grant across the board. I have many misgivings about the accuracy of that formula. Is there sufficient weighting for rural areas? That question is probably going through the mind of the right hon. Member for Orkney and Shetland (Mr. Grimond). Are the alternatives too difficult to introduce at this stage? Does my right hon. Friend the Secretary of State feel that the areas of Scotland that are


far from the central zone are getting a fair crack of the whip? I believe that there is not the equality that I should like to see.
I am particularly interested in Dumfries and Galloway and its four districts. Its allocation is incomprehensible. The local authorities have kept to the guidelines, yet they have ended up in a difficult financial situation. I am sure that my hon. Friend the Member for Galloway (Mr. Lang) will agree on the points relative to his constituency.
The Government rightly reduced the contribution to local authorities by 2½ per cent. Dumfries and Galloway has cut its controllable expenditure by a similar amount, yet by its commendable action, and for various extraneous reasons, the rates will have to go up by between 35 per cent. and 40 per cent. I pray that that increase will be substantially less. I hope that my right hon. Friend will see that its allocation is reassessed by the Government.

Mr. Foulkes: Will the hon. Gentleman spell out in detail the extraneous factors causing the substantial increase of 35 per cent. in the rates in Dumfries and Galloway, because that would be interesting.

Sir Hector Monro: A body of Opposition Members seems to be keen to anticipate what I have to say. I would hardly make such a statement without saying more at the appropriate moment in my speech.
There must be something unacceptable about a formula that results in so many anomalies. The comparatively low rates in south-west Scotland exaggerate the percentage increase. The four district councils in my area expect to increase their rates by between 12 per cent. and 20 per cent. That means an increase of between 1p and 2½p in the pound. Set against inflation that would not seem unreasonable, particularly as rents have gone up by about 1.85p per week. However, that increase of 1p to 2½p adds up to district rates varying from 8p to 12½p. To that we must add the regional rate.
Last year the regional rate, excluding the district rate, increased from 56p to 68p, or by over 20 per cent. This year it looks likely to rise to 90p. My regional authority has strongly pressed the Government to reconsider the matter. If we add in the district rate, the area poundage will be over £1, which may be small for some regions in Scotland, but for Dumfries and Galloway it is extremely high. I ask my right hon. Friend the Secretary of State where the formula is failing. The hon. Member for South Ayrshire (Mr. Foulkes) laughs lightheartedly, but if he can produce a better formula, this is the day to do so. Overall the formula seems to put a greater weighting on areas of high population than those of relatively small population, which are large geographical areas that require substantial servicing.

Mr. Foulkes: Will the hon. Gentleman give way?

Sir Hector Monro: I have not reached my reply to the hon. Gentleman. I ask him to wait.
My right hon. Friend the Secretary of State may feel that it is not for him to reply to this question. Is CoSLA representing the rural areas adequately in its discussions with him? Is CoSLA having a sufficient impact in the negotiations on wages and salaries?
I said to the hon. Member for South Ayrshire that I would talk about the extraneous reasons for the increase in rates. Straight away we come to the complicated area of the valuation decision in Fife. That has had a major

impact on the regions that were involved because of that decision. The cost for Dumfries and Galloway was about £2 million, which came out of the blue, as did the cost for every other regional authority.
Dumfries and Galloway appreciates the clawback awarded by the Secretary of State, but there is still a balance of £1.25 million to pay for the clawback of 1980–81. My right hon. Friend has already mentioned the problems facing the authorities. There has been an agreement on an average wage rise of 4 per cent., and there has been an average cost rise of 9 per cent. set against higher inflation throughout the period.
I want to see tight control of public expenditure. However, I want to hear that the formula is absolutely fair across the board. The local authorities must maintain the services that they have to carry out by statute. Additionally, this year they have had the problems of an acutely difficult winter. There may be more to come and more expenditure may accrue. My right hon. Friend may say that he will take into account the exceptional circumstances for local authorities looking after roads and water services during that difficult period.

Mr. Foulkes: The hon. Gentleman outlined some of the minor extraneous factors that resulted in the major proposed increase in rates in Dumfries and Galloway. Is not the major reason for the increase in the rates the reduction in the rate support grant? The Government are reducing the money they are giving to that area, the ratepayer must pay a substantially increased amount? Is that not the reason, and in trying to support the Government, has not the hon. Gentleman scored an own goal?

Sir Hector Monro: Not all. The hon. Gentleman was obviously not listening to my opening remarks about the necessity of cutting expenditure. If local authorities do not do that, they are bound to balance their books by increasing rates. My point is that where they make a genuine effort to cut expenditure, in line with the wishes of the Secretary of State, it seems that the formula is weighed against those rural areas as opposed to the higher population areas of the central belt. The hon. Member For South Ayrshire should not try to ask leading questions on which he will not get the answer he expects.
We have not touched on, because it does not apply, ihe issue of capital expenditure, but the Secretary of State knows its importance because I have written to him about water services in Dumfries and Galloway for schools and facilities for the disabled. On the other hand, one must return to what the Secretary of State said; if we are to contain inflation in Britain we simply must contain public expenditure. There is no way of getting round that point. That is why he has rightly set out to bring home to those spendthrift local authorities that they must see that in the same light. We cannot continue expanding expenditure and the number of local authority employees without that having a consequent impact on inflation. It is good that the number of employees has levelled out, that local authorities have got the message and that they are beginning to spend less than they were last year or the year before.
However, it is no use saying that we have achieved a goal. We have only begun to reach the point where we can say that we are going in the right direction. We have a very long way to go until local authority public expenditure is


within bounds and can help towards bringing down inflation, and, therefore, increase employment opportunities, which are so important in Britain today.

Mr. David Steel: It is unusual that all hon. Members can begin their speeches agreeing on one point—congratulating the Secretary of State.

Mr. Donald Stewart: I am not following that custom.

Mr. Steel: The right hon. Gentleman must reserve his right to be disagreeable at all times, if he insists, but I wish to congratulate the Secretary of State—because I have nothing else to congratulate him on—for at least arranging for the debate to be held in daylight hours. We should not allow that improvement to pass lightly.
The hon. Member for Dumfries (Sir H. Monro) observed that the rate support grant is an extremely complicated formula. I go further than that and say that I suspect that only half the Scottish Members understand it. I err on the side of generosity, but those hon. Members who understand it fall into one of two distinct categories—those in the Scottish Office or who have served in the Scottish Office who may, giving them the benefit of the doubt, have some insight into how it works, or those who have served in local authorities, particularly on finance committees. The rest of us, who fall into neither of those categories, find it something of a mystery.
As a constructive suggestion, we should have a more general debate on the financing of Scottish local authorities earlier in the year and before the RSG settlement is arrived at so that we can receive our local authorities' views on their budgets and the external and internal aspects of them. That leads me to the point that local government finance needs urgent review.
The hon. Member for Dumfries missed out an important element when comparing the rural areas such as those he and I represent with other areas of Scotland. Our local authorities have never been spendthrifts. Of course, one can find councillors and local newpapers unearthing examples of local government folly in our areas as in any other, and rightly so, but, by and large, local authorities in small and sparsely populated parts of Scotland did not have the fat into which they could cut when the Government came down on them like a ton of bricks. That makes a big difference to the quality of services.
I suspect that no account is taken in the RSG of the inequality of local government services provided, for the same amount of rates, at a basic level in the small rural areas and towns of Scotland compared with perhaps those provided at a more substantial—I hesitate about using the word "luxurious" because nothing is luxurious in the local government areas—and sweeping level in the more populous areas of Scotland. Therefore, the Government's across-the-board approach to the curtailment of local authority expenditure inevitably falls more harshly on areas such as those I represent, for the obvious reason that they are asked to cut not into the fat of their expenditure but the muscle. That happens with local government in the borders.
Another complicating factor in the RSG is that this is the third year out of the last four that there have been

openly declared changes in the RSG formulation between the needs and resources element. If one is in local government and trying to make some sort of assessment of expenditure on more than a year-to-year basis, it becomes extremely difficult if the Government openly change the basis of the formula three times in four years. We are entitled to plead with the Scottish Office, on behalf of local government, at least to try to achieve some measure of continuity and settlement on how the formula is reached.
On the guidelines laid down by the Secretary of State, I come immediately to the inflation figure that the Government have assumed. Where do they get that figure from? Is it just plucked out of thin air? If it is not, we should like to know where it comes from, because it certainly looks as if it is plucked out of thin air. Local authorities are told that the settlement assumes an average of a 4 per cent. increase in wages. When interrupted earlier, the Secretary of State elaborated on that by stressing that it was an average and not a norm. A 4 per cent. average, of course, assumes that some people are below it, and I want to know who in local authority employment is below the average of 4 per cent. I have written to the Under-Secretary about the scale of increases which we know that certain senior local government officials have received. Of course, they are nationally agreed and are not directly within the control of any individual local authority. Some senior officials certainly received a pay increase of over 20 per cent. under the 1981 pay awards.

Mr. Rifkind: Will the right hon. Gentleman accept two points on this matter? First, will he agree that the actual wage settlements local authorities reach are within their own power and are not dictated or determined by outside factors? It is ultimately within their own powers as the employers.

Mr. Canavan: Not if it is a national agreement.

Mr. Rifkind: I am referring not to individual local authorities, but to local authorities as a whole, which are the employers involved in negotiations. Will the right hon. Member for Roxburgh, Selkirk and Peebles also accept that, whatever figure the Government chose in advance as their contribution towards wages in the local authority sector, it would almost certainly be seen as a factor to influence the ultimate settlement? That occurred last year when the Government set a 6 per cent. figure on local authority manual workers who originally asked for a 19 per cent. wage increase. They eventually agreed to a settlement of just over 7 per cent. Would that have been probable if the Government had suggested a much larger figure?

Mr. Steel: I have slightly more sympathy with the Under-Secretary's second point than the first because I am an unreconstructed incomes policy man. The Under-Secretary's trouble is that he does not believe in incomes policy in theory, but he practises it in an arbitrary manner on only one sector of the economy. He would have much more success in controlling wage inflation if the Government accepted an incomes policy as a whole. However, that is getting off the point.
The Under-Secretary was not right in his first assertion. The small district councils, such as those represented by myself and the hon. Member for Dumfries, probably have


no input into the local authority settlements. If local authority officials are graded throughout the country, those with a relatively onerous burden of work will make wage claims that will apply throughout the country. Let us not argue whether that is right or wrong. In 1981 there were two pay settlements of more than 20 per cent. Where does the 4 per cent. figure come from? I am not discussing the rights and wrongs of settlements—they have happened.
The Government, with some justification, take credit for achieving a new pay settlement with the police force. An inflation rate element is built into that substantial increase. The police had fallen behind in pay, and the Government approach was probably right. However, it is no use the Government claiming credit for that while at the same time telling local authorities, which are bound by that agreement, that there is a notional figure of 4 per cent. allowed for wages.
Let us examine the 9 per cent. allowed for expenditure. Local authorities, like any household, must cope with increasing bills and price increases for everything, including fuel. No one in his right mind would suggest that the inflation rate on ordinary expenditure could be contained within 9 per cent. The Government are inflicting a settlement on local authorities, having plucked figures out of the air or decided them at random. They are the figures which, in an ideal society, the Government want to achieve. The Government are largely responsible for the inflation rate, which is determined by their policies, but if they fail the ratepayers must pay the penalty. That is reflected in the level of rate increases now being announced by local authorities in Scotland.
The Grampian region, a Conservative-controlled authority, has announced a 21 per cent. increase. I do not know what the increase will be in the Borders, but there is talk of 25 per cent. Such rate increases add substantially to the overall inflation rate. They affect our industrial life and domestic ratepayers. I do not know what other hon. Members are experiencing, but in my constituency they are also affecting social life. For example, the rate valuation on clubs has increased substantially during the past few years. Almost every voluntary club in the Borders is experiencing financial hardship. With the cutbacks in personal spending that everyone is enduring, people are joining a smaller number of clubs. The rates are an enormous burden and some clubs are now in grave difficulties.
When will the Government go beyond simply publishing Green Papers and fulfil their election promise to reform the rating system? There would be more cheer for us in the middle of this complicated debate if we had an indication of that.
I turn briefly to the effects of the settlement and the various cuts in my area. The Borders regional council grant loss over three successive years has been about £1,800,000. That is a substantial sum for an authority administering a sparsely populated area in Scotland. I agree with the hon. Member for Dumfries that the council is also enduring unexpected increases in expenditure, for example, on roads, which suffered badly during the early part of the winter. If cuts in expenditure are made, there will be no real long-term saving because the roads will deteriorate further and there will be consequent increases in the cost of repairs in later years.
There will be no house building programme in Tweeddale district council because there will be no housing grant this year. That is extraordinary in an area where people are

demanding houses. In Ettrick and Lauderdale the cuts in the housing grant are equivalenttoa£4aweekincreaseincouncil rents. The council is increasing its rents by £2.40 a week, but that does not include any rates increase still to come. Those are substantial increases on individual households, whether they be council tenants or householders, at a time when unemployment in the Borders has risen by 150 percent. over the figure that the Government inherited when they took office. That does not take account of the massive extension of short-time working and lack of overtime, which means that individual household incomes have been savagely reduced.
Throughout Scotland individual expenditure has risen substantially while income has reduced. It was, therefore, not surprising to read a report in The Guardian this morning which, although it did not specify the local authorities surveyed, stated:
In the past six months rent and fuel arrears have risen between 33 per cent. and 100 per cent. The unemployed and the low-paid with large families are equally falling into debt.
There is a real danger that, because of the rate support grant settlement, the poverty gap will grow throughout Britain.

Mr. Younger: Most of the right hon. Gentleman's remarks are relevant to the housing support grant order. However, is he not overlooking the fact that those whom he has mentioned, especially the unemployed, will receive rent rebates and, therefore, will not be affected?

Mr. Steel: Local authorities are making strenuous efforts to ensure that those entitled to rent rebates receive them. But that is not a cop-out from the fact that the average person will have his living standards substantially squeezed because of the settlement.
There is growing doubt among the elected members of the local authorities in my part of Scotland—which are largely independent and composed of many varieties of political opinion—

Mr. John Home Robertson: Not in Berwickshire.

Mr. Steel: I do not speak for Berwickshire, where the hon. Gentleman has to suffer an entirely Tory district council. The councils in my area are largely independent, and have no political axe to grind.
There is growing doubt about the viability of the two-tier system of local government in sparsely populated areas. The Secretary of State said that the Stodart committee had examined that matter. It did not. It examined minor changes of functions. The Secretary of State and the Under-Secretary should enter into discussions with local authorities. I cannot speak for all of Scotland, but an area with a population of 100,000 cannot sustain the expense of a two-tier system of local government. Without going into great detail about changes of boundaries and responsibilities, I think that it would be immensely successful if the Government began discussions with local authorities on how to introduce a one-tier system and reduce the overall cost of administering local government. The Government should concentrate on that, together with a fundamental reform of the rating system.

Mr. Allen Adams: I find it appalling that the Secretary of State should come to the Dispatch Box today and boast about the loss of 1,000 jobs in the Scottish Office. The Conservative Party appears to think that it is good to shed 1,000 jobs and add to the dole queue—and


that against the background of 350,000 unemployed in Scotland. It is shameful and unbelievable that a Minister should boast that he has created unemployment.
I have been wondering what I could call the Secretary of State. I read in the newspapers that the word stool-pigeon is unparliamentary, so I cannot use that word, although I can understand it if people outside think that. Perhaps I can say that the policies that he has outlined this afternoon show that he and his Government could be described as barnacles on the ship of progress. I trust that that is not unparliamentary language.
This afternoon we have had the usual diatribe of meaningless jargon. Statistic after statistic has been quoted. I do not understand what has been said, and I am sure that most hon. Gentlemen do not understand it either. The vast majority of people in the country will wonder what the formula for rate support grant means. It could be said that the Secretary of State for Scotland has used statistics in the way that a drunken man uses a lamppost—for support, not illumination.
Let us look at the facts. They make the case not for a decrease but for a substantial increase in public expenditure in Scotland, certainly in the west of Scotland I cite my own area, the Paisley and Renfrew district, as a good example of a place where more public funds are needed.
I contend that, in the rate support and the housing order that is to follow, the Government are seeking to shift the burden from the ratepayer to the rentpayer. This Government's essential creed is that rates are too high, and rents are too low, and that the balance should be redistributed so that the average person living in a council house pays more than he is paying now. The Secretary of State is saying that the Renfrew district council will get £4 million less in rate support grant than it says it needs. The twist here is that, if it tries to meet that deficit by increasing the rates to make up the difference of £4 million, next year the Secretary of State will give it even less money. Year by year, the Government are stealthily withdrawing central Government funds. Far from protecting the local ratepayer, the Government are making it clear that they intend that the entire burden of local democracy shall eventually be borne by the local ratepayer and, if they get their way, more and more by the local rentpayer.
Ludicrous figures have been given. The formula involves a 4 per cent. increase in wages. How can any government justify a local authority worker who has a wage of £60 to £70 a week, which means a take-home pay of £50 to £55, getting a rise of only 4 per cent? That is all that is allowed in the rate support grant. It means that the man will have only £60 at the end of the year, while inflation rages at 15 to 18 per cent.—which I expect it will be by the end of the year.
What will happen to rents? In the Renfrew district, rents will probably have to be increased by about 30 per cent. No doubt the Secretary of State will say "Yes, of course, but the person who is unemployed will no doubt get an increase in rent rebate. No doubt there will be an increase in rate rebate". That is all very well if the person is unemployed. The policy will hit the man in the middle of the scale earning £70, £80, or £90 a week, who will not qualify for any rebate. The average working man who lives

in a council house—about 60 per cent. to 70 per cent. of the population in Scotland—will be considerably worse off by about £8 a month.
This rejigging has meant that in the past few years local authorities have been unable to build council houses. Were they to obtain borrowing permission, the high interest rates would make it extremely difficult for them to pay back the interest loans—but, of course, they have not had that permission. The situation is the same throughout the West of Scotland, but Paisley is a good example. There 10,000 people are now on the waiting list for council houses. Ten years ago only 1,000 people were on the waiting list. Now there are 12,000 people on the exchange list. That is because the housing there is old and damp and was built 30 or 40 years ago. The housing support grant—we cannot divorce rates from rents—in the Renfrew district is nil because the housing is old and the council has a big housing debt.
If 10,000 houses were built in Renfrew district in the coming year it would need more money from the Government—assuming that the Government gave borrowing consent. As a result, young couples who were taken out of old tenement properties by their parents 20 or 30 years ago now find that, because the local authority has not the wherewithal to build new council houses, have to go back to the slums which their parents left a decade or two ago.
The Government have turned their backs on council housing. They do not believe in it. They believe that coucil houses should be for the poorest people in society. They believe in welfare housing. They believe that housing should be provided only for the poorest people, the old, the sick and the disabled, and that local authorities should be encouraged to sell everything else to the fit, the able, and those in work. In my area, unfortunately, that has to be viewed against a background of 17 to 18 per cent. unemployment or—in cold, hard figures—17,000 to 18,000 people on the dole, who will not take kindly to the fact that the local authority cannot provide services which it was in a position to provide up to a couple of years ago.
We must turn our face against the whole concept of Government policy. We should not argue about £1 million here or £1 million there, about £100,000 here or £100,000 there. The underlying principle of Government policy is essentially wrong and misguided. This country needs a huge injection of public money into local authorities and public works to get people back to work. One of the ways to get people back to work is to put money into local authorities and thereby encourage them to employ people, buy products, and build roads and schools. Roosevelt did it in the 1930s, and he proved that it could work. This country now needs another Roosevelt. We need a New Deal, and new men in Government.

Mr. Bill Walker: The hon. Member for Paisley (Mr. Adams) must believe that public money grows on trees. I can only assume that there are many trees with public money in his part of Scotland. Public money comes from the public, and the public have reached the point where they are not prepared to give any more.

Mr. James Hamilton: Does the hon. Gentleman agree that the £13 billion spent on the unemployed and social security is also public money?

Mr. Walker: All money spent by the Government is raised in taxes or borrowed. Sadly, previous Governments have borrowed too much, leaving successive Governments with a crippling burden of debt at national and local level. Revenue expenditure is hit because the money comes from possible revenue expenditure and, equally, capital expenditure is savagely hit.
The Perth and Kinross district council welcomes the decision by my right hon. Friend the Secretary of State to give it some protection from the general abatement of rate support grant. As a responsible and prudent authority, it has contained its expenditure within last year's guidelines.

Mr. Ernie Ross: Will the hon. Gentleman tell the House and the people of Perth exactly what councillor Proudfoot, the leader of the Perth and Kinross district council and chairman of the finance committee, said to the hon. Gentleman when they met at 2 o'clock this afternoon?

Mr. Walker: I am delighted to have the opportunity to do so. On five separate occasions councillor Proudfoot said that he fully supported Government policy. I took note of what he said at my meeting with him at 2 o'clock, because I thought that some hon. Member would refer to it.

Mr. Foulkes: rose—

Mr. Walker: I shall not give way.
I draw my right hon. Friend's attention to the difficulty that the Perth and Kinross district council and the Tayside region will have in keeping within this year's guidelines. The Government's figures suggest that 4 per cent. has been allowed for an increase in wages. However, both authorities calculate that the increase in wages in their areas will be about 8 per cent. The Government calculate that there will be a general inflation rate of about 9 per cent. The authorities calculate that the figure will be nearer 13 per cent. I caution my right hon. and hon. Friends that I cannot see the Tayside region or the Perth and Kinross district council keeping expenditure within this year's guidelines.
No one will deny that both authorities have been very good. They have complied with the wishes of successive Governments—both Labour and Conservative. But I place on record that both authorities will be in some difficulty this year, although they wish to comply with the Government's guidelines. Indeed, councillor Proudfoot took the opportunity of telling me that five times this afternoon.
I am concerned mainly about employment prospects in Tayside and the impact of rates on commerce and industry. The situation is particularly acute in the Dundee area, where many of my constituents work. The postition may not be as punitive in Perth and Kinross, but the rates can and will create problems for some employers in the district and, sadly, may lead to further redundancies. Penal increases in commercial and industrial rates in the Dundee district in recent years have increased redundancies in the area. Redundancies will continue if the past level of increases is maintained.
In 1979–80 the non-domestic rates in Angus were 23·3 per cent. For Dundee the figure is 38·4 per cent. and for Perth and Kinross 24·3 per cent. In 1981–82 the figure for Angus will be 24·3 per cent., for Dundee 46·6 per cent.—I stress that figure—and for Perth and Kinross 24·9 per cent.
It is interesting that the savage increases in Dundee have not been consistent. Under a Tory-controlled Dundee, the percentage fell from 38·4 percent. to 33·7 per cent. Therefore, substantial savings can be made. Sadly, many of my constituents work in Dundee district, and they see their jobs put at risk by the savage and penal level of non-domestic rates. Much is made about domestic rates, but I wish to emphasise the link between the level of non-domestic rates and jobs. After all, we hear a great deal from the Opposition about jobs.

Mr. Home Roberston: rose—

Mr. Walker: I do not care to give way at present. However, 70 per cent. of local authority—

Mr. Ernie Ross: Will the hon. Gentleman give way?

Mr. Walker: I shall give way, as I have mentioned Dundee district.

Mr. Ross: Will the hon. Gentleman list the firms in Dundee that have closed because of allegedly high rates?

Mr. Walker: The Dundee Courier will be delighted to supply the hon. Gentleman with that information, because it regularly includes such news. I should bore hon. Members if I were to give the details, because the list is so long. The hon. Gentleman and I try to work together to protect jobs. There are times when we may differ, but it is important to draw attention to the relationship between the costs that employers face and the prospect of maintaining jobs. Hon. Members who do not recognise that link must be living in cloud-cuckoo-land.
At present, 70 per cent. of local authority current expenditure consists of staff costs. It is interesting that in June 1979 there were about 256,700 local authority employees. In June 1981, that figure had increased to 262,200. That is a substantial increase, especially when the rest of the country is facing savage redundancies. How can local authorities justify maintaining large staffs in departments when their needs have dramatically and drastically changed? I cite, for example, the departments for architects and quantity surveyors. If there are substantial cuts in expenditure on capital projects, how can architects—employed as a result of the massive expansion programme of the past 20 years—be gainfully employed? How can local authorities maintain such staffing levels?
A comparison can be draws between Dundee district, with its architectural and general services department, and Perth and Kinross. Perth and Kinross employs only 10 per cent. of the number employed by Dundee. Although some allowance must be made for local differences, it is hard to justify a 90 per cent. difference in manning levels. I do not understand that. Surely it is sensible to give work to private architects and quantity surveyors, and to face costs only when major projects are in hand? That would be a logical step.

Mr. Ernie Ross: ross—

Mr. Walker: Changing commitments and a changing population mix mean that authorities will require the services of individuals trained in different disciplines. Change must bring that upon us. However, there is substantial evidence to show that that does not happen, and there are many instances of imbalances between manning levels and local needs.
I was fortunate to attend and address a conference held by local authority directors of personnel. There was some


considerable interest. The directors understood what I was trying to get at. [Interruption.] I like the Opposition's jollity, but it so happens that I am trained in personnel management.
I have been a fellow of the Institute of Personnel Management for many years. I was able to speak to the personnel directors on a professional basis. We understood each other. They accepted that there were many instances where necessary changes had not taken place. I suggested that they were not carrying out their professional duties properly if they were not advising their employees of the need for change. I am delighted to say that at the end of the conference I was told that my speech was refreshing; it was unusual to have someone speaking to them on the basis of one professional to another with an understanding of the problems that personnel directors face.
Every year we seem to be faced with the constant and unsatisfactory situation in which highly emotive charges are made about the level of services and the alleged link with the level of the rate support grant. The level varies enormously. However, it is obvious that money is not the only link. There are other factors that we must look at.
The time has come for Parliament to face the challenge of replacing the present unhappy and unsatisfactory rating system. During the present world recession, all Governments—in particular, the Government of the United Kingdom—need to reduce expenditure. Local government expenditure cannot be excluded from that need. Expenditure must be contained if inflation is to be reduced, because inflation is the real destroyer of jobs. If we are to improve Britain's ability to compete in world markets, the sooner we face the challenge of local authority finance, the better.

Mr. Donald Stewart: rose—

Mr. Ernie Ross: Follow that.

Mr. Stewart: It would be beyond me to follow the speech of the hon. Member for Perth and East Perthshire (Mr. Walker). We realise now, if we had not already done so, that the hon. Member is a real all-rounder. He is learned in all kinds of disciplines, philosophies, professions and so on. In spite of that, he grasped the essential point made by my hon. Friend the Member for Dundee, East (Mr. Wilson) about Tayside. Although the Tayside councillors had been good boys, according to the guidelines laid down by the Secretary of State, their fate was exactly the same as that of the other local authorities—they were clobbered in the same way.
The hon. Member for Dumfries (Sir H. Monro)—who is just leaving us—talked about cutting expenditures. The Secretary of State mentioned a number of employees in his Department with whom he had dispensed. We were told that one of the great achievements of local Government reorganisation would be that there would be economies of scale; that there would be far fewer officials running around under the new authorities. As with so many of these assurances, within a decade they are shown to be manifestly absurd.
The cutting of expenditure presents local authorities with a problem. Many of the functions with which they are now saddled were laid upon them by both Labour and Conservative Governments. At the time, local authorities

had little or no objection because they were adequately funded. The hon. Member for Paisley (Mr. Adams) said that there was a steady withdrawal of Government funds to local authorities. That is true, but it started with the Labour Government. The public expect those functions to be continued. The Government would be very annoyed if any local authorities were to drop them, yet the Government are steadily withdrawing the funds with which they originally supported those functions. The Government are carrying on the tradition of reduced local financial autonomy that was started under the Labour Government, when expenditure was cut by the then Secretary of State.
The Government are hitting certain programmes particularly hard, including transport, education, housing—it almost looks as though the Government will abandon housing—and environmental services.
In December 1981 it was announced that the rate support grant would be cut further, bringing it down to only 64.2 per cent. of the relevant expenditure. The cuts in the rate support grant, together with the increasing use of legal powers and sanctions against councils stepping out of line, have been central to the Government's wild strategy of slashing public expenditure.

Dr. M. S. Miller: Is the right hon. Gentleman aware that, at a time when the Government are reducing the rate support grant to local authorities, there is one area in which they are urging local authorities to spend more money and that is on so-called defence against a nuclear holocaust? What does the right hon. Gentleman think of that stupid idea of the Government?

Mr. Stewart: My view on that subject is well known. I regard such expenditure as having nothing to do with defence; in fact, if it were to be cut substantially the country would be in no more danger than it is at present.
The Government have been unable to control the money supply in the way that they planned to do, and have now resorted to an attempt to use local government as a scapegoat for the failure of the monetarist policies.
It is interesting to note that the restrictions and controls applied by central Government to the Scottish local authorities are still increasing, thanks to the Local Government and Planning (Scotland) Bill, while in England, because of adjustments to the Local Government Finance (No. 2) Bill, restrictions on authorities there are being eased. In England and Wales there will be no super clawback, and the circumstances in which local authorities can be penalised for overspending are being eased.
The Tory Government are being doubly harsh on Scotland. That is not altogether surprising, because Scotland did not vote for a Tory Government. It may be the Tories' way of paying Scotland back—[Interruption.] My party is not in power and making slashing cuts in public expenditure. It is the right hon. Gentleman and his friends, who have no mandate whatever from Scotland, who are carrying out these dastardly cuts.
The previous Labour Government were little better, following the reorganisation of 1975. They steadily cut back local government expenditure. Total expenditure was cut by 8.7 per cent. between 1975–76 and 1979–80. Capital expenditure was cut considerably, falling by 26–7 per cent. in that period. It was the Labour Government who started cutting back rate support grant. They introduced cash limits in 1976–77 and were the first to allow the Secretary


of State for Scotland to cut rate support grant if a local authority was incurring excessive and unreasonable expenditure. That power was granted under the Local Government (Scotland) Act 1966.
The Labour-controlled authorities, having fulfilled their pledge to protect their services from Tory cuts, refused to use the only political argument that can challenge the diktat of the Secretary of State—the nationalist message that the Tories have no mandate to govern Scotland. Thus, even the most determined of Labour efforts to protect public services will fail, because the Labour Party ultimately accepts that the Secretary of State and the Tories have a right to impose the cuts. That is the dilemma that the Labour Party has to face.
I now turn to the position in my own constituency. The latest announcements on rate support grant for the coming year will, according to the convenor of the council, force the Highlands council to the brink of bankruptcy. The Government, in their calculations for the council's rate support grant, have based any increase that is due to compensate for inflation on 9 per cent., whereas, as we all know, the inflation figure has been 12 per cent. The Government have allowed for only a 4 per cent. wage rise, instead of facing reality and allowing for 7 per cent. That point has been amply dealt with by other speakers this afternoon, so I need not go into it except to say that the figures are quite unrealistic.
As things stand, the Western Isles council will exceed the guidelines by some £2.74 million. The council has already pointed out to the Secretary of State that it has been treated more harshly in its opinion than any other local authority in Scotland. The Secretary of State was claiming that the Government had made special arrangements for the council. The hon. Member for Paisley was trying to think of a word he could use to describe the Secretary of State. In view of the Secretary of State's claim to have given special consideration to the Western Isles council, whatever the council is calling him, it certainly is not Santa Claus. The council convenor, the Rev. Don Macaulay, has stated that to take £2·74 million out of a budget which was cut by £1·8 million last year is impossible.
The Scottish National Party remains committed to the abolition of domestic rates and supports the introduction of a system of local income tax as a means of supplying local authority finance in conjunction with a national Government grant system. In the meantime, we consider it ridiculous, unjust and unacceptable that a country such as Scotland, with £6,000 million per year accruing from Scottish oil alone, should be subject to such treatment from any British Government.
A mere 5·4 per cent. of the oil revenues would enable Scottish local authority expenditure to be returned to pre-1979 levels. Much more could be done if we had self-government for Scotland. That will have to wait for a little while. Even the 42 Labour MPs from Scotland show little willingness to take the political step of following the independence path that would save Scotland from disaster and would mean that Scotland would never have to put up with another piece of legislation such as we have before us today.

Mr. David Lambie: Unlike the hon. Member for Perth and East Perthshire (Mr. Walker) I am no professional in these matters. I do not understand

the order we are debating. If there is a formula, I do not understand that formula and I do not think any hon. Member understands it.
My experience of taking part in rate support grant arid housing support grant order debates since entering the House has been that no matter what the formula is or whether one understands the formula, all one needs to look at is Government policy. By doing that and looking at the financial aims of the Government one ends up with a result and does not need the formula.
The only person I ever knew in my political experience who could understand these formulae in the days of the equalisation grant was my father, who used to be treasurer of the burgh of Saltcoats. He did not use the formula but he could use his head. He was a representative of the Convention of Royal Burghs and he always made sure that the convention did not agree to finalise the negotiations until he discovered what the effects would be on Saltcoats. If Saltcoats would still have the lowest rents in Europe and rates well below the Scottish average then the formula satisfied him, and he agreed that the convention should sign. Unfortunately now there are no negotiations, a point made by the representatives of local government. CoSLA.

Mr. Foulkes: There is no burgh of Saltcoats either.

Mr. Lambie:: That is correct, but my father is still there.
The Secretary of State criticised my right hon. and hon. Friends for supporting similar orders tabled by previous Governments. That accusation might be made against one or two of my right hon. and hon. Friends but, as I always say, in these matters my hands are clean. Since entering Parliament in 1970 I have taken part in most of the debates on rate support grant orders. In the period of the Conservative Government from 1970 to 1974 they used to con us, as they con all new Members, by telling us that on no account could we vote against such an order. At that time the debate took place before the Christmas Recess. We were told that we could criticise the order but that we should not vote against it, otherwise the local authorities would have no money to pay their employees and we would be blamed for causing unemployment arid redundancies.
When the Labour Government came into office in 1974 we discovered that we could vote against these orders. On many occasions my hon. Friend the Member for West Stirlingshire (Mr. Canavan) and I initiated debates on the orders and voted against them. So some of us have always opposed the tendency of national Governments to interfere with the rights of local government by transferring to it duties of national Government without transferring the necessary finance to carry out the duties.
That has been happening over the 11 years or so that I have been a Member of Parliament. That trend has nearly reached finality. Now we have in control not a democratic Secretary of State for Scotland but a dictator, a person with more dictatorial powers than the Polish military regime has over local government services in Poland. We have a Secretary of State who instructs local authorities by statute to do certain things and then does not provide them with the necessary money. That is why the ratepayers of Scotland are facing increases of 20 to 25 per cent. in their rates this year.
Some hon. Members have referred to rate poundage. When we are considering the rates we should not look at


the rate poundage alone but at valuations and the rate poundage. I represent an area with some of the highest valuations in Scotland in the town of Troon. The high valuations also spread to the neighbouring towns of Prestwick and Ayr, which are represented by the Secretary of State for Scotland, so he knows the problem. It is not the rate poundage about which our constituents are worried but the high valuations on which they pay their rates. I think increases of 20 to 25 per cent. will be the minimum. The problems that the Secretary of State and I faced last year will be nothing to the problems we will have this year because of the implications of the order.
I have been in contact with the main local authority in my constituency. Cunninghame district council has asked me to make several points to the Secretary of State, and I should like answers from him or from his hon. Friend when he winds up. Up to now the annual expenditure guidelines were based not on an assessment of the circumstances of individual local authorities but rather on past expenditure. As a result, local authorities which were high spenders in previous years receive a higher percentage of the total money allocated for local government.
The Secretary of State claims that the guidelines for 1982 and 1983 are based on a more sophisticated technique of client groups. Whatever the merits of this, it is important to note that the figures brought out are being adjusted in the interests of stability. After the Government have applied their formula they say that it might create certain anomalies and that therefore they should consider the concept of stability. The idea of stability brings out a national guideline for 1982–83 which at the end of the day is significantly less than the guideline for 1981–82. They modify the formula, but in the end it is clear that the Government are giving less money to local authorities.
It would be helpful to me and my district council if the Secretary of State would explain what he means when he says that the guidelines for 1982–83 remain indicative. Does that mean that he accepts that there is a degree of guess work about them and that they cannot and do not take into account and reflect local circumstances and needs? My own district council put that question to officials at St. Andrew's House during the summer and have not received an answer, I should like an answer from the Secretary of State tonight. It is no use our voting on a rate support grant order when we do not know these concepts.
Cunninghame district council made a specific request that it be provided with a copy of the calculations for its guidelines for 1981–82, which amounted to £6·62 million. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) asked how local authorities knew whether the guidelines were adequate, whether they were getting fair play, unless they knew the basis of the calculations. Clearly, the calculations exist. Cunninghame district council believes that—as the Secretary of State has contrasted, in the House and elsewhere, the guidelines and the planned expenditure—it is entitled to have a copy. I ask the right hon. Gentleman to give hon. Members a copy or to send copies to our local authorities.
No matter what happens in this debate, the Government will win, because they have a majority. Therefore, the local authorities will face enforcement of the order. In my constituency we have 24·7 per cent. unemployment.
Nearly every third male is unemployed. We face massive increases in rents, whether we live in an Irvine development corporation house, a Scottish Special Housing Association House or a district council house—increases of between £2 and £3. We shall now face massive increases in rates if the order goes through without amendment.
Therefore, I wonder how long the Scottish people, including those whom I represent, will put up with the present Government, whose policies are creating mass unemployment and mass poverty. How long will the Scottish people put up with representatives such as those on the Tory Front Bench? Their policies are not working in Scotland, and we should have a general election now to get rid of the present Government and bring in a Government that will look after the interests of the working people of Scotland.

Sir Russell Fairgrieve: Rather than deal with the detailed arguments of the hon. Member for Central Ayrshire (Mr. Lambie), I should like briefly to philosophise on the problems that cause these regular debates on rate support grants and on some of the truisms that we seem to miss.
The first matter, in both local and national Government, is the continual reference to public money. We cannot too often remind ourselves that there is no such thing as public money. When we call for money to be spent, nationally or locally, we mean that the taxpayer must fork out a bit more.
Like my hon. Friend the Member for Dumfries (Sir H. Monro), I had the privilege of being a member of a local authority for about 10 years and, as with my hon. Friend, it was before reorganisation. I know that many hon. Members on both sides of the House have served on local authorities. I was always amazed how people—whom one knew in one's town as running a tight, competent business—almost seemed to forget what money was—how it went out of fashion—when they became councillors. The way in which they, as councillors, spent money was totally unlike the way in which they dealt with it in their own businesses.

Mr. Lambie: That is unfair.

Sir Russell Fairgrieve: I am reminded of the story of the local government meeting where item 4 on the agenda for the purchase, laying out and construction of a site for industry costing £25 million went through on the nod, but item 7—the purchase of a secondhand bicycle for a school janitor—took 25 minutes of hard argument. That is one of the problems when people do not consider money in the same way for everything.

Mr. Donald Stewart: I think that on reflection the hon. Gentleman will regard that comment as an unfair assertion against local authorities in Scotland. I served on a local authority for a considerable time. Business men and people of other professions serving on the county council on which I served and on other councils known to me had some regard for the fact that they were spending public money. There may have been the odd person here and there who had a drunken sailor attitude, but generally the attitude was very responsible. I do not think that the hon. Gentleman should leave his assertion on the record.

Sir Russell Fairgrieve: I am not denying the existence of responsibility, particularly in Scotland. I said at the beginning of my speech that I would philosophise. I am talking about human nature and what happens when the responsibility is not directly our own.
Manpower costs money. Nationally, at Government level, both in England and Scotland, numbers carrying out the same job have dropped. In local government, numbers have dropped in England but not in Scotland. That must worry us.
We have begun to learn the hard way that not every problem is solved by throwing money at it. Similarly, not every problem is solved by throwing people at it. We have seen that in British industry, many parts of which are efficient, where loss-making is prevented when firms operate with fewer rather than more people.
I have some sympathy with the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel)—I do not agree with him on many other points—that perhaps there is a case in a country the size of Scotland for only one tier of local government. However, after the traumatic constitutional debates that we have had, it would be wrong to make further changes in this area for many years.
A change in the rates system must be made. Almost any system would be better than the present system. With more than 50 per cent. of local government expenditure being funded by the national Exchequer, there is probably now a case for rates being replaced by national taxation, each local authority being given a block grant and deciding how to spend its money. Although not perfect, that would be a better system.
Having tried to outline some of the human problems behind the concept of public money, I shall be glad to support the order.

Mr. Jim Craigen: Other than The Press and Journal, I do not know the local papers in West Aberdeenshire, but I shall read the Perth Advertiser this weekend, because I met councillor Jim Proudfoot this morning and the message I got was certainly rather different from the one which the hon. Member for Perth and East Perthshire (Mr. Walker) conveyed this afternoon. Moreover, when the hon. Gentleman started to talk about public expenditure, I thought he was at least going to tell us that he had been a city chamberlain or a banker. I would point out that the Chancellor of the Exchequer could save £435 million for every 100,000 unemployed people he gets into employment. That is the kind of public expenditure saving that we ought to be talking about.
The rate support grant order for 1982 is totally unrealistic as regards the services that Scottish local authorities are obliged to undertake. The indexation in terms of pay settlements and cost of living increases is totally inadequate, and rather dishonest in the measure that they seek to establish for local authorities and the control that they must exercise over their own financial affairs.
The hon. Member for Aberdeenshire, West (Sir R. Fairgrieve) referred to the reform of local government finance. There was very little forthcoming in the consultative document published just before the new year. When the Government took office we were led to expect that there would be considerable reform of local government finance, but all that emerged from the Green Paper was TINA—there is no alternative to the present system of domestic rating.
The decision to go ahead with the partial revaluation of industrial and commercial properties in 1983 is somewhat cynical for a Government who continue to tell us that they are anxious about the plight of industry and commerce. Significantly, they will not have a revaluation of domestic properties, because it is too near the general election. Perhaps in the meantime somebody in a little room in S t. Andrew's House is working out the possibilities of moving over from rental values to a system of determining rateable values on capital values.
My hon. Friend the Member for Central Ayrshire (Mr. Lambie) referred to rent levels. Of course, the Government are hoping to get more experience of house prices in both the private and the public sectors as house sales in the public sector expand. It may be that we shall have such a system.

Mr. Lambie: As regards the Government thinking about going over to fixing valuations on the basis of the capital value, does my hon. Friend realise that was what was wrong with the revaluations in Troon, Prestwick and Ayr? The Strathclyde assessor illegally used capital values to assess the value of properties in the area. That is what all the trouble is about.

Mr. Craigen: My hon. Friend is such a keen defender of the citizens of Troon that the Secretary of State wants that area in his own constituency in the parliamentary boundaries reorganisation.
The local authorities want to know what these ground rules are. They would like to know the methodology that is operating from New St. Andrew's House. Ministers tell us that local authorities are free to draw up their own priorities. When we try to probe them on these priorities they say it is up to the local authorities to determine their own priorities. When we go to the local councils, the councillors say "What can we do? We are dependent on the resources that we are largely getting from central Government and they are giving us inadequate resources, so we cannot draw up the priorities that we would like."
Reference has been made to the client group, as though this is some precise and scientific system rather than, as it is, an arbitrary guideline determined by the Secretary of State for Scotland. I understand that someone in the Scottish Office may know the A to Z of client groups, but he knows only because somebody in the Department of the Environment has told him, since officials there have had much more experience of the operation of that system.
What is worrying the local authorities now is the fact that these guidelines are being used in a very precise way for the distribution formula. The situation is like the case of the old examiner who, when marking papers, would stand at the top of the staircase and throw them down the stairs, and the student would be marked according to the step on which his paper landed. I think that Glasgow has landed on the bottom step, because, although the Secretary of State praised Glasgow district council's efforts in reducing costs by 5 per cent., still 15 per cent. above the guidelines because of the difficulty of trying to contain expenditure below present costs.
In my constituency modernisation programmes involving rewiring or new window frames and other necessary updating measures are having to be pushed back for years. New building is coming to a halt. Sheltered housing projects which we hoped would go ahead are being delayed. The problems of single persons are


becoming even more acute in Glasgow. Although the population of the city is decreasing, the number of households is increasing. This is a real problem for single people trying to get housing.
The people who did a great deal to finance the return of this Conservative Government are now getting very little in the way of work. Many private building firms are already on their knees. The cut in the housing support grant will have a considerable effect on private sector building companies, in a city with just under 100,000 unemployed in the travel-to-work area.
I have heard the Secretary of State more than once talk about the number of people getting rent rebates as though that were a matter of great pride. It is an indication of the low incomes in the city and elsewhere. It may be that he does not understand the implications. In Glasgow, more than 100,000 people depend on rent rebates. That is not a matter in which I take particular pride, and I do not think that the Secretary of State for Scotland ought to take pride in it. If he is determined to tell local authorities the precise level of rent that must be charged, why does he not have national rent levels? At least it would be more honest. The public would know where they stood as regards rents.
Turning to the rate support grant, I hope that the right hon. Gentleman will pay some heed to the plea put forward by the Strathclyde regional council regarding the debt that it has had to write off two years running. In Glasgow, people are literally being priced off the buses, and it looks as though there may have to be another increase in bus fares. It is becoming difficult for people to travel to work, more difficult for people to travel in search of work and certainly very difficult for young people who want to go out for an evening's entertainment. This is having an effect on the city centre.
The regional elections are coming up. We are not talking about whether there will be one tier of local government left, as the right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) said. There will be no local government if this Government have their way, because we are reaching the stage where the Secretary of State wants to fix the rate poundages and do everything that local authorities are supposed to do.
We have also reached the point where local government service calls for the qualities and versatility of an elected Houdini. The Secretary of State and his Ministers at the Scottish Office, instead of applying their minds and energies to trying to strengthen the fabric of Scottish social and economic life, seem to be devoting more and more of their attention to finding new ways of manacling, shackling and boxing in the local authorities. I shall be very surprised if local government in Scotland survives more years under this present Secretary of State.

Mr. Michael Ancram: I do not wish to delay the House, but I feel constrained to speak in view of one or two things said by Labour Members, particularly the synthetic hostility of the hon. Member for Glasgow, Maryhill (Mr. Craigen). The Opposition's only attack is that the Secretary of State is being cruel and hard-nosed by cutting local government expenditure in real terms. If that accusation were correct, it could be said that the Secretary of State has singularly failed since 1979, because it is my understanding—I hope that my hon.
Friend the Under-Secretary will confirm this in his reply—that in each year since the Conservative Government came to office local government expenditure in Scotland has increased in real terms. That is an important point, and I hope that Labour Members will understand it.
My right hon. Friend the Secretary of State has said all along that he seeks to reduce local government expenditure in Scotland to the level that it was in 1978. At the meeting today CoSLA was challenged to say whether it agreed with the Secretary of State that the current level proposed was still above the level in 1978. It could give no answer. When asked about the manning level comparisons between 1978 and now, CoSLA told us that it needed notice of that question. That is absolutely staggering, because my right hon. Friend the Secretary of State has given CoSLA notice of it day after day, week after week, and month after month for the past year.
My second point relates to my own region of Lothian. Thanks to the Government's action last year, expenditure in Lothian has been reduced. We are carrying into the next year the level of rate that was set in order to meet a higher level of expenditure last year. On that basis, if the Lothian region goes for a no-growth budget, it is possible for the rate to be reduced. That does not take into account the other areas in which reductions can be made. Those may be small areas, but they all add up.
I offer Lothian one candidate. It should not open the schools and spend a great deal of ratepayers' money on entertaining CND demonstrations in Edinburgh. Before the Labour council in Lothian is defeated at the regional elections in May, it might be a final gesture if it reduced the rates and conceded to the ratepayers of Lothian and Edinburgh that they had been treated badly.

Mr. George Foulkes: Perhaps it is appropriate for me to follow the hon. Member for Edinburgh, South (Mr. Ancram) who is probably a ratepayer in more regions than anyone else in the House.
Earlier in the debate we saw the appalling spectacle of the Secretary of State trying to tell the House and the people of Scotland that there have been no cuts in local authority services. However much he twists the facts—I must not use the word "twister"—or however much he wriggles, he will never convince anyone with an open mind, either in the House or in Scotland, that there are no cuts in services.
The Secretary of State and the Under-Secretary have only to travel around Scotland to see the cuts, the empty old people's homes, and the old people who are no longer getting home helps. They will see that there are clear cuts in local authority services. Indeed, it is the essence of monetarist policy that there ought to be cuts. We hear of the Prime Minister and the Chancellor of the Exchequer going along and receiving accolades at business men's lunches. Business men never look too badly off at those lunches—the rates do not seem to be harming them. The right hon. Lady and the right hon. and learned Gentleman cannot say on the one hand "We are making these massive cuts because they are necessary as part of our monetarist policy", and on the other "There are no cuts". It is impossible to be the mad axeman at lunchtime and try to be Lady Bountiful in the afternoon.
This year, the Secretary of State is imposing a threefold cut on Scottish local authorities. The first is the clawback


because of so-called overspending. Let us give the lie once and for all to this ridiculous idea that these authorities are overspending. They are not. They are spending what they think is necessary—many would like to spend much more—to provide decent services for the people in their areas. It is alleged that they are overspending in the context of the totally, arbitrary guidelines produced by the Secretary of State for Scotland, but those guidelines bear no relation to the needs of the people in those areas.
Secondly, there is the cut in rate support grant—2½ per cent. There has been a clear switch from central support for services to the ratepayer. The hon. Member for Dumfries (Sir H. Munro) seemed genuinely surprised that the rates in Dumfries and Galloway would have to increase. I almost felt sorry for him. As I tried to point out, the main reason why ratepayers in Dumfries and Galloway will have to pay more is that the Secretary of State is cutting the rate support grant to that and every other region.
The third cut also helps to explain why Dumfries and Galloway are not doing particularly well. I understand that the change in calculation from the historic method to the client method will disadvantage the regions.

Mr. Rifkind: >indicated dissent.

Mr. Foulkes: Perhaps the Minister will explain the guidelines. When the all-party deputation met CoSLA, it asked that the Minister should explain the guidelines. It said that the guidelines were just as big a mystery as where Lord Lucan had gone or what will happen to Freddie Laker—

Mr. Rifkind: Or the Labour Party.

Mr. Foulkes: —or what is happening to the Tory vote in Scotland. It is imperative that we know the formula and the details about the guidelines. As my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said, the guidelines are no longer indicative, they are mandatory, and if they are not adhered to, there is a penalty on local authorities.
The Secretary of State has presented a paper to CoSLA on client group calculations. CoSLA tells us that it is too general and totally useless. As the guidelines are so important, it has asked the right hon. Gentleman to amplify that report.
I do not know what transformation came over Councillor Proudfoot at lunchtime, but he told us that Perth and Kinross, which the Secretary of State described as a good authority, faced a 20 per cent. increase in rates on a stand-still budget just because of the Government cutbacks. The good people of Perth and Kinross, including my father-in-law, will have to pay an extra 20 per cent. just because of the cuts that the Secretary of State is imposing.
It has already been said that the local authorities are becoming fed up with what they describe as "negotiation by ministerial pronouncement". That is because of the arrogance of the Secretary of State and the Under-Secretary. I know the Under-Secretary well and he is getting more arrogant—I do not know whether it is power going to his head. The Government are losing the confidence of local authorities because they are not involving them in the discussions.
For example, a pronouncement was made by the Secretary of State about the rate support grant without any

consultation about, for example, the Strathclyde passenger transport executive payments, and other arguments that CoSLA subsequently put forward, far too late to be taken account of.
The Secretary of State, as do all of us, falls into the trap of talking about figures and percentages and other calculations in an abstract way. We must relate them to the services that are being provided. The Secretary of State spoke in glowing terms about the cuts that have been made in the number of officials in St. Andrew's House. I regret that there are more people unemployed because of the cuts that the Secretary of State has made. However, to compare the bureaucrats of St. Andrew's House with the people providing services at ground level in local authorities is a false comparison.
We see the bureaucrats arriving in bunches, like Fyffes bananas, in Glasgow corporation buses at these debates. They are not providing the services at the grassroots that the local authorities provide. When talking about local authority cutbacks, we mean cutbacks in education, among other things. The Secretary of State is ensuring that there are fewer teachers in schools, fewer people looking after the elderly, and fewer home help services, and that roads are not maintained and water and drainage services are put at risk.
If we are trying to attract industry and providing the infrastructure for industry that will build up the Scotland of the future then we need such things as water and drainage services. We are also talking about cleansing and the collection of refuse and about leisure and recreation services for people who have more and more free time and who need opportunities for-leisure and recreation. These are the direct services—they are not the abstract percentage, not the bureacrats in town halls but the people who deliver services to those in need, and other ratepayers.
We seldom hear the Secretary of State and the Under-Secretary talking about these important services. They give gratuitous thanks when we have a bad winter and the local authority employees pull out all the stops. They pull out all the stops not just when we have a bad winter but day in and day out, week in and week out to look after the sick, the elderly, those in need and the children in care.
Because of the cutbacks that the Secretary of State is imposing on local authorities, a number of serious things have happened. I have already drawn the attention of the Secretary of State for Scotland and the Secretary of State for Social Services to the subject of child care in Tayside. I pay tribute to the Under-Secretary of State because know that he has rightly put a bombshell under Tayside social workers. Because of public expenditure cuts and because there was no money for in-service training or for the kind of support that the social workers need, there have been professional reports, produced within Tayside to show that children under the care of Tayside regional council are not receiving the kind of support and care that we should expect from authorities that take children into care.
I have given another example in the education service. We were recently told that the number of teachers has been. reduced by a greater amount than the number of pupils. When there are reducing rolls the difficulty of providing specialist teaching, particularly for senior pupils in secondary schools, becomes great. I raised the question in relation to the teaching of Russian in schools, which in Scottish schools has almost collapsed. After that was in the papers, I received letters from teachers of other languages,


which said that the teaching of almost every minority language in Scottish schools has collapsed and that this is the result of the cutbacks that the Secretary of State is imposing.
I could go on, although I do not have time to do so, —

Mr. Donald Dewar: One minute.

Mr. Foulkes: I have one minute, my hon. Friend points out to me.
I could go on outlining the real effects of the cuts in the schools, the old people's homes and on individual people in local authorities.
Rather than harassing the local authorities that are providing decent services, and causing them problems by asking them to reduce the services they are providing, the Secretary of State, and the officials that he still has left in St. Andrew's House would be far better occupied making sure that local authorities such as Grampian, Tayside and Dumfries and Galloway could put their services up to a decent standard. That is what the Secretary of State should be doing, not harassing the good authorities in Scotland.

Mr. Donald Dewar: The speech of the Secretary of State for Scotland was insufferably complacent. He seemed to be remarkably pleased with himself, considering the difficulties that he is creating for local government in Scotland. Perhaps it was due to the nature of his brief but probably his speech reflected his attitudes as well. At one time, almost unbelievably, I heard him giving thanks for the Local Government (Miscellaneous Provisions) Bill, as if that piece of oppressive legislation were a blessing in disguise for local democracy.
This attitude can be justified only if misery is to be the norm and if we are to have the state of constant crisis which amounts to "business as usual" under this Administration. The Secretary of State should be ashamed of what he is doing and of its effects. His was a lamentable speech when measured against the crisis which is affecting local government. At one time, he even managed to refer to the increase in public sector unemployment, both in his own office and in local government, as heartening. If we have a Secretary of State who finds an increase in unemployment heartening, we have come to a sad pass.
What is more, there was a total absence of argument in the Secretary of State's defence of his policy. So complete was the absence of argument that it is necessary to make the right hon. Gentleman's case for him, since he failed to do so, in order to examine what is happening.
The Government claim that the relevant expenditure in the rate support grant for this year is an increase and they are setting what they describe as realistic targets for local authorities. To some extent, the Government rely on confusion and they are aided and abetted in their fraud by the switch from volume terms to cash terms in the figures.
However, CoSLA has calculated—and, although it is a vested interest in that it represents local government, the calculation has been done fairly—that on a standstill budget, taking the 1980-81 figures and revaluing only for inflation, there is a cut of 6.4 per cent. That will have a serious impact because that is the true comparison between what was budgeted for by local authorities and the

expenditure for 1982–83 which has been set by the Government. That would be bad enough, but on top of that there is a cut in the RSG of 2·5 per cent.

Dr. M. S. Miller: Does my hon. Friend agree that there is a 6·4 per cent. average but that within that there will be areas which require more services and which will thus suffer a much bigger cut?

Mr. Dewar: I agree. The matter bristles with inequalities and anomalies, one or two or which I shall come to in a minute. Let us stay with the 2½ per cent. cut in the grant rate.
The Secretary of State put up his usual diversionary exercise by his selective use of history. He tried to create a bogy man—Mr. Four Per Cent., as he would no doubt have us call my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). No matter how much the Secretary of State twists and turns or ducks and runs, what we are interested in is what is happening now, which is a substantial transfer from the taxpayer to the ratepayer.
The hon. Member for Edinburgh, Pentlands (Mr. Rifkind) waxes eloquent and at great length about his splendid record as the defender of the ratepayer. The hon. Member might contemplate the effect on the ratepayer of that kind of transfer. It will be devastating and serious. We have the 6·4 per cent. cut. We have the rate support grant coming down by 2·5 per cent. Then we have the clawbacks—in some ways, the most unfair of all. There is a clawback that relates to 1980–81. It is no good the Minister saying that he relied on CoSLA advice. At the end of the day, he took a decision. He allowed the money to be spent and the books to be closed. Then, in an arbitrary, unfair and indefensible way, he says that he wants to claw back no less that £50 million, which will fall in the coming year.
The hon. Gentleman acts on the basis of the most suspect possible figures. He says that there was an overspend of £70 million. There is, however, a respectable argument to which the hon. Gentleman did not even listen before coming to his arbitrary decision which says that the £70 million is a vast over-estimate of the real situation. It includes a number of major items such as the writing off by Strathclyde region of the passenger transport authority deficit, the expected revenue from school transport, where the Government have had to retreat in the face of the House of Lords, and a number of major items that do not fall within the support grant calculation.
The whole basis on which the £70 million was calculated is almost certainly fraudulent. The clawback cannot be justified in any reasonable manner. On top of this—it is injustice piled upon injustice—there is to be a clawback for 1981–82 of £27 million. The impact on services and rates will inevitably be serious. If that were not bad enough, there is also the farce and the open flouting of experience of the likely outcome to be found in the Government's approach to cash limits and particularly the inflation factor.
In 1981–82, the Government revalued on the November 1980 base by 7·3 per cent. CoSLA feels that the real figure—no one, not even the Secretary of State, who does not believe in dealing with real arguments, has denied it—should have been 10·9 per cent. If my arithmetic is correct, this means that there has been a loss in grant of about £50 million. In 1982–83, we are expected to live with 4 per cent. on wages and 9 per cent. on other local


authority costs. If this proves wrong, we are told that there will be no increase order; there will be only compensation for variations in interest rates. If the inflation rate, a byproduct of Government economic policy, goes significantly above these arbitrary and unrealistic figures, the unfortunate local authorities will have to live with the consequences.
The settlement we are discussing is quite inadequate. The way in which it was arrived at is objectionable. I take as an example a comparatively small matter but one of considerable significance. I refer to the repayment to the handful of authorities, the six authorities, which managed to keep within the Government's guidelines. It is an eloquent comment on the ludicrous guidelines that were set that only six authorities managed to stay within them. They have been given a backhander, a sort of tip, of about £0·7 million for being good boys. The methodology is suspect. The money is being disbursed on the basis of estimated expenditure. It may be found, when the outturn figures are seen, that a number of these authorities will not be within the guidelines. I can think of one or two where, I understand, that will almost certainly be the case. I am not sure whether there will be a mini-clawback to snatch back from them the money that has been handed out.
The significance of this state of affairs is that it finally gives the lie to the position that Ministers have blandly maintained in the face of a great deal of evidence, that the guidelines are only indicative, not binding. Ministers have repeatedly given this assurance. The handout to the six authorities makes it clear that at the end of the day the ability to live within the guidelines has been built into the distribution formula. It has been given by the Government a set place in the distribution formula.
The guidelines are now clearly becoming mandatory and not indicative. This represents another broken pledge by the Government. We are reaching a situation where the Government's word—I say this frankly to the Minister—is no longer trusted, not only among Labour authorities but among Tory authorities. This was made abundantly clear to hon. Members who today met representatives of CoSLA. If the Minister wishes to see to what extent the Government have departed from their pledges, I remind him of what was said by a witness, Mr. T. Winwick, principal of the local government finance branch of the Foreign Office, before the Joint Committee on Statutory Instruments that investigated the Rate Support Grant Reduction (Dundee and Stirling Districts) 1981–82 report on 14 July 1981. On the issue of the guidelines, he said:
The Secretary of State has made it clear repeatedly that the guidelines are indicative, not definitive, and in no way mandatory. Just as he would expect that there could be some authorities who would exceed the guidelines, so it is also expected that there would be some authorities who would come below".
That is no longer a tenable position. The Secretary of State now says clearly that the guidelines are not issued merely as a guide. It is not accepted that whether some are above or below is within the discretion of the authorities. The right hon. Gentleman is saying that the authorities must stay below the guidelines and that they will be penalised if they go above them. There will also be handouts and little bribes if they manage to keep within them.
The cover has ultimately been blown. The rate support grant settlement for 1982–83 will have a horrific impact in a number of respects. It will have an impact on jobs. I have already mentioned the remark of the Secretary of State that

he was heartened by the increasing dole queues that result from public sector job losses. What makes this attack on public sector employees particularly unpleasant is that many of the jobs have been created by the diktat, fiat and legislation of successive Governments.
Even now in the House hon. Members are enacting a unified housing benefit system that will inevitably lead to a considerable increase in local government manpower. This will be criticised no doubt by the Secretary of Slate as profligate and unnecessary. New services are constantly imposed on local government. On checking today with Strathclyde council, I find that the discretionary grants for -children's clothing that used to be made by the Department of Health and Social Security have been pushed on to local government by the Secretary of State and his colleagues. In 1980–81, Strathclyde disbursed—it was only part of a year—about £50,000. In 1981–82 it was £500,000. For 1982–83, it is budgeting for over £750,000 which undoubtedly, given rising unemployment figures, is a conservative estimate. That As an example of an impost that has been shifted from central to local government: in a cynical manner. No provision has been made for it, so far as I know, in terms of the rate support grant.
I could mention many more casualties. One of them, as I have already remarked, is the trust and confidence between local government and the Secretary of State. Hon. Members have heard Conservative councillors who have been appalled by a history of confusion and muddle compounded by shameful lack of consultation that has marked the birth of this rate support grant settlement over the last few months.
The final victim is the ratepayer. Here, the cant and hypocrisy of the Minister reach new heights. That is illustrated by what has happened to the ratepayer over the past two or three years under this Government and the prospect for the next year under this rate support grant order.
The speech of the hon. Member for Dumfries (Sir H. Monro) was, in many ways, the best speech of the debate. It was a splendid speech, a veritable cri de Coeur, pathetic almost to hear. The hon. Gentleman was saying "What has gone wrong with the formula? Why is Dumfries, this splendid body of Conservatives who have done everything right, to be faced with 35 per cent. on the rates in the coming year?" The reason, of course, is that the formula is unfair, that it is fundamentally misconceived and that it is the work of his hon. Friends whom he will, sadly no doubt, despite his words, support in the Lobby.
I would say to the hon. Member for Perth and East Perthshire (Mr. Walker) that I, too, attended the CoSLA meeting and heard the representative from that district council saying openly that he was dismayed about what was happening. His authority had received a "divi" and got money back from the £700,000. It had struggled manfully to do what the Government wanted but would be faced with a standstill budget and a rate increase of about 20 per cent.
Even in Grampian region, which the Minister tells us so often is his ideal local authority, we find Councillor Sandy Mutch complaining. I remember from my days in South Aberdeen that he was the personification of the Conservative Party in north-east Scotland. The Press and Journal of 5 February 1982 said that he
complained bitterly about Mr. Younger's attitude towards Grampian's share of the Rate Support Grant settlement. The region, he said, had always run 'a tight ship' and yet despite their


efforts, which had attracted Scottish Office commendation for efficient budgeting and good housekeeping, they were penalised as harshly as any of the defaulting local authorities. Said Councillor Mutch: 'I don't want anything extra, but …we don't want to be clobbered.'
Councillor Mutch, after all the years of ploughing through the political wilderness, is now being clobbered by a Conservative Government.
I resent what the Minister said yesterday in the Local Government and Planning (Scotland) Bill Committee when he represented that there was widespread Conservative support for his local government policy. It is universally condemned by both Labour and Conservative councils. The strategy that is embodied in the order is unsound in concept, arbitrary in execution and inequitable in effect. It is not just rough justice, as the Secretary of State claimed it occasionally is: it is no justice at all. Because we feel that so strongly, and because we know that we are backed by Scottish public opinion, we shall vote against the order and make our protests in the Lobby tonight.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): I thank those hon. Members on both sides of the House who have welcomed the fact that, for the first time, this debate is taking place at a reasonable time. It demonstrates the importance that the Government attach to the subject that, unlike previous Administrations, we have felt able to provide time for the debate now.
Opposition Members have made many references to critical remarks that Conservative councillors may or may not have made today to the Members of Parliament whom they met. A constant feature of almost every meeting that I and my right hon. Friend have had with the Convention of Scottish Local Authorities has been the convener of Strathclyde region, a senior Labour councillor, assuring us that he was not just being rude to us but that he would have been equally rude to previous Labour Governments. He emphasised that we had heard nothing compared with some of the remarks that he made to the right hon. Member for Glasgow, Craigton (Mr. Millan) when he was on the receiving end of the right hon. Gentleman's largesse a few years ago.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) and the right hon. Member for Craigton tried to conceal the fact that, in 1976, the Labour Government imposed not a 2½ per cent. reduction in grants but a 4 per cent. reduction purely to force down local authority spending. So critical were Opposition Members on that occasion and so unwilling were they to accept the bogus explanation that was given then and today that the hon. Member for Central Ayrshire (Mr. Lambie) and some of his hon. Friends voted against that rate support grant, thereby showing their view of the Labour Government's policies.
The right hon.Member for Craigton is the last person who can make a convincing case that Labour Governments and Oppositions speak with a single voice. We know that, whatever the right hon. Gentleman and the hon. Member for Garscadden say today, the brave words that came from the Opposition Front Bench were not matched by the puny efforts of the Labour Government. The right hon. Member for Western Isles (Mr. Stewart) was correct to point out that the Labour Government's policy resulted in serious

and deep criticism from the Labour councillors. Opposition Members should not suggest today that the position was different. I give a wreath of integrity to the hon. Member for Central Ayrshire that is not shared by his right hon. and hon. Friends on the Opposition Front Bench.
Some of my hon. Friends have referred to the undoubted fact that when a general abatement is introduced it has very wide effects. I say to my hon. Friend the Member for Dumfries (Sir H. Monro) and my hon. Friend the Member for Perth and East Perthshire (Mr. Walker) that in the case of both Dumfries and Galloway regional council and Perth and Kinross district council they have seen in two separate ways how the Government have tried to protect authorities from the consequences of a high degree of irresponsibility in other local authorities.
Under the 1981 Act, £34 million in penalty was extracted from the authorities primarily responsible for excessive and unreasonable expenditure, a penalty which, if it had not been extracted in that way, would have been shared by all authorities, including Dumfries and Galloway and Perth and Kinross. Those two authorities suffered not one penny of abatement in 1981–82. Although we can now apply much greater selectivity than was available to the Labour Government or to past Administrations, there are still no means available whereby we can match the penalty that might be suffered by a local authority to its overspending compared with the guidelines. The right hon. Member for Roxburgh, Selkirk and Peebles (Mr. Steel) was correct to point out the implications for an area such as the Borders.
However, the remedy is essentially in the hands of the local authorities. If they wish to see a system whereby the effects of a general abatement are distributed according to the overspending of each authority, my right hon. Friend and the Government would be only too happy to respond to such a proposal from CoSLA. However, CoSLA and the individual authorities cannot have it both ways. If they say that they object to being singled out or to the guidelines being given significant consideration by the Government, and that they wish all local authorities to be treated as a single unit, they cannot then object when the general abatement has a random effect irrespective of the overspending of individual authorities.
If the bulk of the authorities in CoSLA believe themselves to be responsible, they should discuss whether the Government, before introducing a general abatement, should ensure that the effects of that abatement are applied according to the overspending of each authority. If that is what the majority of responsible authorities wish, they should say so in public and not just in private and they will not find the Government slow to respond. However, if they are not willing to bring forward that proposal, they must accept that the consequences of a general abatement will, to some extent, be erratic and random, although under the Government it is much less so than under any previous Administration.
I turn now to the other basic claim that has been made by the local authorities and by Opposition Members who wish to promote their cause.

Mr. David Steel: Surely the Under-Secretary of State will consider my other point, which is that the Government, in issuing their guidelines, should take into account the different standards of services already prevailing in the local authorities.

Mr. Rifkind: The Government are already trying to do that. The new client group approach is a more sophisticated method of determining guidelines. We have invited CoSLA to join the Scottish Office in discussing the methodology of guidelines, but up to today it has declined to do so. I say again that if it wishes to influence the way in which the guidelines are determined or the methodology that is applied, it will find the Government only too willing to enter into serious discussions about ways of improving them. I hope that that covers the right hon. Gentleman's point.

Mr. Lambie: The chief executive of Cunningham district council wrote to the Scottish Office at St. Andrew's House and asked those questions, but he has not yet received an answer to his letter.

Mr. Rifkind: The Scottish Office must work through CoSLA. If it wishes to enter into discussions on methodology, we shall be only too happy to respond.
The basic case of the Scottish local authorities is that during the past three years, in response to Government pressure, they have cut their expenditure to the bone and they have tried to respond to what the Government have sought. They claim that they have made swingeing cuts in all areas of expenditure, but despite their enormous efforts, and the unprecendented reductions in spending, the Government harshly demand more from them and greater sacrifices. If that was the position, whatever the Government's policy might be, one could not but have some sympathy for local authorities. I have no doubt that some local authorities will have done just that.
However, if we consider the aggregate of Scottish local authority expenditure since the Government came to office, I must tell the hon. Member for South Ayrshire (Mr. Foulkes) that, while it may be true that reductions have been made in some areas of expenditure, they have been more than matched by increases elsewhere. I shall give the hon. Gentleman the harsh and unpalatable facts, On a constant price basis, applying November 1980 prices, in 1979–80 local authority current expenditure was £2,163 million. The following year, it rose to £2,197 million. In the current year, it went up again to £2,236 million. Whatever else that might be, in each year that is an increase in real terms of growth in local authority current expenditure.

Mr. Foulkes: Does no the Minister agree that a great deal of that growth is caused by increases in loan charges because of high interest rates, increases in the cost of heating and other increases caused directly as a result of the Government's action?

Mr. Rifkind: That argument is incorrect. The simple fact is that local authorities that have sought to maintain that they have cut their spending to the bone and have made major sacrifices have moved in the opposite direction. If the Government can be criticised for anything, it is for not succeeding in reducing local authority current expenditure. My hon. Friend the Member for Edinburgh, South (Mr. Ancram) was correct to make that point. Goodness knows what would have happened to local authority expenditure if we had not applied our attempts to reduce and restrain it.
Over the past three years there has been growth. Also, if we look at local authority manpower, we find that in Scotland—not in England and Wales, where local

authority manpower has been reduced by 90,000 in the last few years—loal authority staffs number 2,000 more than when the Government came to office.

Mr. Dewar: I recognise the familiar tune that the Minister is playing, but we are interested in what will happen in the coming year. The Minister has seen CoSLA's figures, which suggest that on a standstill budget there is a 6 per cent. reduction in relevant expenditure. Is that an accurate picture of what will happen?

Mr. Rifkind: The right hon. Member for Craigton compared that figure with a 4 per cent. figure in England and Wales. If there is a discrepancy, that difference is explained by the simple fact that the level of overspending that we start off with in Scotland is, I regret, significantly higher than it is in England and Wales. Therefore, the figure given by the hon. Gentleman may be correct. However, the effect on any individual authority depends on the extent to which it is overspending. Many authorities will have to make fewer cuts to meet the guidelines compared with other local authorities.
The basic case of local authorities would have more substance and would carry more weight if those authorities could say that, over the last three years, their overall current expenditure in real terms had reduced. It has not, however. It has been increased in real terms. Their staffing has gone up in real terms. [Interruption.] That is not just because of the increase in numbers of police. That is a minor fraction of the changes in staffing numbers over the period concerned.

Mr. Dewar: The Minister will know that, in the Rate Support Grant (Scotland) Order 1982, it is stated:
The Government proposed to allow an increase in the programme for local authority current expenditure in order to sct local authorities a realistic expenditure target.
If the CoSLA figures are correct, is the Minister allowing them an increase in their expenditure? Is he not playing with words?

Mr. Rifkind: I am not playing with words. I fully accept that the statement becomes of relatively little significance, given the desire of local authorities as a whole to increase their expenditure. We know that, when the right hon. Member for Craigton faced that problem in 1976, he put such pressure on local authorities that they reduced their staffing by about 14,000. He reduced the grant percentage by 4 per cent. Forced by the IMF, he achieved major reductions in local authority spending.
The local authorities have argued that there must be give and take and compromise between them and the Secretary of State. The Government's attitude is that compromise requires give on both sides. It requires local authorities to show their willingness to reduce their expenditure in the national interest. While I give credit to local authorities that have reduced their expenditure, the simple fact is that the bulk of local authorities have failed to do so. I hope that they will now recognise where the national interest lies and what is required.

Sir Hector Monro: As my hon. Friend knows, I am entirely in agreement with his overall policy of restricting expenditure. Will he look at the formula in detail to see whether it is unfairly affecting rural areas?

Mr. Rifkind: We are always willing to look at representations from local authorities, either with CoSLA or individually, when they have grievances about. distribution.
The fundamental question remains one of the totality of local authority expenditure. If local authorities wish the Secretary of State and the Government to recognise their problems and to reach agreement with them, I hope that they will agree to reverse the trend of the last few years and to begin to make real reductions in their overall expenditure.
It is on the basis that local authority expenditure has unfortunately increased over the past three years that the order is put before the House. Local authorities' staffing has increased. On that basis, we have adopted the recommendation of the right hon. Member for Craigton that, by a grant percentage reduction and other means, we hope to bring home to local authorities that the national interest requires them to reduce their spending. I commend the order to the House.

Question put:—

The House divided:: Ayes 304, Noes 231.

Division No. 64]
[7.15 pm


AYES


Adley,Robert
Clark, Sir W.(Croydon S)


Aitken,Jonathan
Clarke,Kenneth (Rushcliffe)


Alexander,Richard
Clegg, SirWalter


Alison, Rt Hon Michael
Cockeram,Eric


Amery, Rt Hon Julian
Colvin, Michael


Ancram, Michael
Cope, John


Arnold, Tom
Cormack, Patrick


Aspinwall, Jack
Corrie, John


Atkins, Rt Hon H.(S'thorne)
Costain, SirAlbert


Atkins, Robert(Preston N)
Cranborne, Viscount


Atkinson, David(B'm'th',E)
Critchley, Julian


Baker, Kenneth(St.M'bone)
Crouch, David


Baker, Nicholas(NDorset)
Dean, Paul(North Somerset)


Beaumont-Dark,Anthony
Dickens, Geoffrey


Bell, SirRonald
Dorrell, Stephen


Bendall,Vivian
Douglas-Hamilton, LordJ.


Bennett, SirFrederic(T'bay)
Dover, Denshore


Benyon, Thomas (A'don)
du Cann, Rt Hon Edward


Benyon, W.(Buckingham)
Dunn, Robert(Dartford)


Best, Keith
Durant, Tony


Bevan, David Gilroy
Dykes, Hugh


Biffen, RtHon John
Eden, RtHon Sir John


Biggs-Davison,SirJohn
Edwards, Rt Hon N.(P'broke)


Blackburn, John
Eggar, Tim


Blaker, Peter
Emery, Sir Peter


Body, Richard
Eyre, Reginald


Bonsor, SirNicholas
Fairgrieve, SirRussell


Boscawen, Hon Robert
Faith, MrsSheila


Bottomley, Peter(W'wich W)
Farr, John


Bowden, Andrew
Fell, Sir Anthony


Boyson, Dr Rhodes
Fenner, Mrs Peggy


Braine, SirBernard
Finsberg, Geoffrey


Bright, Graham
Fisher, Sir Nigel


Brinton, Tim
Fletcher, A.(Ed'nb'ghN)


Brittan, Rt. Hon. Leon
Fletcher-Cooke.SirCharles


Brooke, Hon Peter
Fookes, Miss Janet


Brotherton, Michael
Forman, Nigel


Brown, Michael(Brigg&amp;Sc'n)
Fowler, Rt Hon Norman


Browne,John (Winchester)
Fox, Marcus


Bruce-Gardyne,John
Fraser, Peter (South Angus)


Buck, Antony
Fry, Peter


Budgen, Nick
Gardiner, George(Reigate)


Bulmer, Esmond
Gardner, Edward (S Fylde)


Burden, SirFrederick
Garel-Jones, Tristan


Butcher, John
Gilmour, RtHon Sir Ian


Cadbury, Jocelyn
Glyn, Dr Alan


Carlisle, John (Luton West)
Goodhart, SirPhilip


Carlisle, Kenneth (Lincoln)
Goodhew, SirVictor


Carlisle, Rt Hon M.((R'c'n)
Goodlad, Alastair


Chalker, Mrs. Lynda
Gorst, John


Channon, Rt. Hon. Paul
Gow, Ian


Chapman, Sydney
Grant, Anthony (Harrow C)


Clark, Hon A.(Plym'th, S'n)
Greenway, Harry





Grieve, Percy
Mills, Peter (West Devon)


Griffiths, E.(B'ySt.Edm'ds)
Miscampbell, Norman


Grffitths,Peter Portsm'thN)
Moate, Roger


Grist, Ian
Monro,SirHector


Grylls,Michael
Moore,John


Gummer,John Selwyn
Morgan, Geraint


Hamilton, Hon A.
Morris, M.(N'hampton S)


Hamilton,Michael(Salisbury)
Morrison, Hon C.(Devizes)


Hampson.Dr Keith
Morrison, Hon P.(Chester)


Hannam,John
Mudd, David


Haselhurst,Alan
Murphy,Christopher


Hastings,Stephen
Myles, David


Havers, Rt Hon Sir Michael
Neale.Gerrard


Hawkins,Paul
Needham,Richard


Hawksley,Warren
Nelson,Anthony


Hayhoe, Barney
Neubert, Michael


Heath, Rt Hon Edward
Newton, Tony


Heddle, John
Normanton, Tom


Henderson, Barry
Nott, Rt Hon John


Heseltine, Rt Hon Michael
Onslow,Cranley


Hicks,Robert
Oppenheim, Rt Hon Mrs S.


Higgins, Rt Hon Terence L.
Osborn,John


Hogg.HonDouglas(Gr'th'm)
Page, John (Harrow, West)


Holland,Philip(Carlton)
Page, Richard (SW Herts)


Hooson,Tom
Parkinson, Rt Hon Cecil


Hordern,Peter
Parris,Matthew


Howe, Rt Hon Sir Geoffrey
Patten,Christopher(Bath)


Howell, Rt Hon D.(G'ldf'd)
Patten, John(Oxford)


Howell, Ralph (N Norfolk)
Pattie,Geoffrey


Hunt, David (Wirral)
Pawsey, James


Hunt,John(Ravensbourne)
Percival, Sir lan


Hurd, Hon Douglas
Pink, R. Bonner


Jenkin, Rt Hon Patrick
Pollock,Alexander


Jessel, Toby
Porter,Barry


JohnsonSmith, Geoffrey
Prentice, Rt Hon Reg


Jopling, Rt Hon Michael
Price, Sir David (Eastleigh)


Joseph, Rt Hon Sir Keith
Prior, Rt Hon James


Kellett-Bowman, MrsElaine
Proctor, K. Harvey


Kershaw, Sir Anthony
Pym, Rt Hon Francis


Kimball, Sir Marcus
Raison, Timothy


King, Rt Hon Tom
Rathbone, Tim


Kitson, SirTimothy
Rees, Peter (Dover and Deal)


Knight, MrsJill
Rees-Davies, W. R.


Knox, David
Renton, Tim


Lamont, Norman
Rhodes James, Robert


Lang, Ian
Rhys Williams, SirBrandon


Langford-Holt, Sir John
Ridley, Hon Nicholas


Latham, Michael
Ridsdale, Sir Julian


Lawrence, Ivan
Rifkind, Malcolm


Lee, John
Rippon, Rt Hon Geoffrey


LeMarchant, Spencer
Roberts, M.(Cardiff NW)


Lester, Jim (Beeston)
Roberts, Wyn (Conway)


Lewis, Kenneth (Rutland)
Rossi, Hugh


Lloyd, Ian (Havant&amp; W'loo)
Rost, Peter


Lloyd, Peter (Fareham)
Royle, Sir Anthony


Loveridge, John
Sainsbury, Hon Timothy


Luce, Richard
Shaw, Michael(Scarborough)


Lyell, Nicholas
Shelton, William(Streatham)


McCrindle, Robert
Shepherd, Colin(Hereford)


Macfarlane, Neil
Shepherd, Richard


MacKay, John (Argyll)
Shersby, Michael


Macmillan, Rt Hon M.
Silvester, Fred


McNair-Wilson,M.(N'bury)
Sims, Roger


McNair-Wilson, P. (NewF'st)
Smith, Dudley


McQuarrie,Albert
Speed, Keith


Madel, David
Speller, Tony


Major john
Spence, John


Marland, Paul
Spicer, Jim (West Dorset)


Marlow,Antony
Spicer, Michael (S Worcs)


Marshall, Michael (Arundel)
Sproat, Iain


Marten, Rt Hon Neil
Squire, Robin


Mates, Michael
Stainton, Keith


Maude, Rt Hon Sir Angus
Stanbrook, Ivor


Mawby, Ray
Stanley, John


Maxwell-Hyslop, Robin
Steen, Anthony


Mayhew,Patrick
Stevens, Martin


Mellor, David
Stewart, A. (ERenfrewshire)


Meyer, Sir Anthony
Stewart, Ian (Hitchin)


Miller, Hal (B'grove)
Stokes, John


Mills, Iain (Meriden)
Stradling Thomas.J.






Tapsell, Peter
Walters, Dennis


Tebbit, Rt Hon Norman
Ward,John


Temple-Morris, Peter
Warren, Kenneth


Thomas, Rt Hon Peter
Watson, john


Thompson,Donald
Wells, Bowen


Thorne, Neil(Ilford South)
Wells,John(Maidstone)


Thornton, Malcolm
Wheeler, John


Townend, John (Bridlington)
Whitelaw, Rt Hon William


Townsend, CyrilD,(B'heath)
Whitney, Raymond


Trippier, David
Wickenden, Keith


Trotter, Neville
Wiggin, Jerry


van Straubenzee, Sir W.
Wilkinson, John


Vaughan, DrGerard
Williams, D.(Montgomery)


Viggers, Peter
Winterton, Nicholas


Waddington, David
Wolfson, Mark


Wakeham, John
Young, Sir George(Acton)


Waldegrave, Hon William
Younger, Rt Hon George


Walker, Rt Hon P.(W'cester)



Walker, B.(Perth)
Tellers for the Ayes:


Walker-Smith, Rt Hon Sir D.
Mr. Anthony Berry and


Wall, Sir Patrick
Mr. Carol Mather.


NOES


Abse, Leo
Dewar, Donald


Adams, Allen
Dixon, Donald


Allaun, Frank
Dobson, Frank


Alton, David
Dormand, Jack


Anderson, Donald
Dubs, Alfred


Archer, Rt Hon Peter
Dunnett, Jack


Ashley, Rt Hon Jack
Dunwoody, Hon Mrs G.


Ashton, Joe
Eadie, Alex


Atkinson, N.(H'gey,)
Eastham, Ken


Bagier, GordonA.T.
Edwards, R.(W'hampt'n S E)


Barnett.Guy (Greenwich)
Ellis, R.(NED'bysh're))


Barnett, Rt Hon Joel(H'wd)
English, Michael


Beith, A. J.
Ennals, Rt Hon David


Bennett, Andrew(St'kp'tN)
Evans, loan (Aberdare)


Bidwell, Sydney
Evans, John (Newton)


Booth, Rt Hon Albert
Ewing, Harry


Bottomley, Rt Hon A. (M'b'ro)
Faulds,Andrew


Bray, Dr Jeremy
Field, Frank


Brown, Hugh D.(Provan)
Fitch, Alan


Brown, R. C. (N'castle W)
Fitt, Gerard


Brown, Ronald W. (H'ckn'yS)
Flannery, Martin


Brown, Ron(E'burgh, Leith)
Fletcher, Ted (Darlington)

Buchan, Norman
Ford, Ben


Callaghan, Rt Hon J.
Forrester, John


Callaghan, Jim (Midd't'n&amp;P)
Foster, Derek


Campbell, Ian
Foulkes, George


Campbell Savours, Dale
Fraser, J. (Lamb'th, N'w'd)


Canavan, Dennis
Freeson, Rt Hon Reginald


Carmichael, Neil
Freud, Clement


Carter-Jones, Lewis
Garrett, John (Norwich S)


Cartwright, John
Garrett, W. E. (Wallsend)


Clark, Dr David (S Shields)
George,Bruce


Cocks, Rt Hon M. (B'stol S)
Gilbert, Rt Hon Dr John


Cohen, Stanley
Ginsburg, David


Coleman, Donald
Golding, John


Concannon, Rt Hon J. D.
Graham, Ted


Cook, Robin F.
G rant, George (Morpeth)


Cowans, Harry
Grant, John (Islington C)


Craigen, J. M. (G'gow, M'hill)
Grimond, Rt Hon J.


Crowther,Stan
Hamilton,James(Bothwell)


Cryer, Bob
Hamilton, W. W. (C'tral Fife)


Cunliffe,Lawrence
Harrison, Rt Hon Walter


Cunningham, DrJ.(W'h'n)
Hart, Rt Hon Dame Judith


Dalyell, Tam
Hattersley, Rt Hon Roy


Davidson,Arthur
Haynes, Frank


Davies, Ifor (Gower)
Healey, Rt Hon Denis


Davis, Clinton (HackneyC)
Hogg, N.(EDunb't'nshire)


Davis, Terry (B'ham, Stechf'd)
HomeRobertson, John


Deakins,Eric
Homewood, William


Dean, Joseph (Leeds West)
Hooley, Frank





Howell, Rt Hon D.
Pavitt, Laurie


Howells, Geraint
Pendry, Tom


Huckfield, Les
Penhaligon,David


Hughes, Mark(Durham)
Pitt, William Henry


Hughes, Robert (Aberdeen N)
Powell, Raymond (Ogmore)


Hughes, Roy (Newport)
Price, C. (Lewisham W)


Janner, Hon Greville
Race, Reg


Jay, Rt Hon Douglas
Rees, Rt Hon M (Leeds S)


John, Brynmor
Richardson, Jo


Johnson, James (Hull West)
Roberts,Allan (Bootle)


Johnson, Walter (Derby S)
Roberts, Ernest (Hackney N)


Johnston, Russell(Inverness)
Roberts,Gwilym(Cannock)


Jones, Rt Hon Alec (Rh'dda)
Robertson, George


Jones, Barry (East Flint)
Robinson, G.(Coventry NW)


Jones, Dan (Burnley)
Rooker, J. W.


Kaufman, Rt Hon Gerald
Roper,John


Kerr, Russell
Ross, Ernest (Dundee West)


Lambie, David
Ryman, John


Lamborn, Harry
Sandelson, Neville


Lamond,James
Sever, John


Leadbitter, Ted
Sheerman, Barry


Leighton,Ronald
Sheldon, Rt Hon R.


Lestor, Miss Joan
Shore, Rt Hon Peter


Lewis, Arthur(N'ham NW)
Short, Mrs Renée


Lewis, Ron (Carlisle)
Silkin, Rt Hon J. (Deptford)


Litherland, Robert
Silkin, Rt Hon S. C.(Dulwich)


Lofthouse, Geoffrey
Silverman,Julius


Lyon, Alexander(York)
Skinner, Dennis


Lyons, Edward (Bradf'dW)
Soley, Clive


McCartney, Hugh
Spearing, Nigel


McDonald, DrOonagh
Spriggs, Leslie


McElhone, Frank
Stallard, A.W.


McGuire, Michael(Ince)
Steel, Rt Hon David


McKelvey, William
Stewart, Rt Hon D.(W Isles)


MacKenzie, Rt Hon Gregor
Stoddart,David


Maclennan, Robert
Stott, Roger


McNally,Thomas
Strang, Gavin


McNamara, Kevin
Summerskill, Hon Dr Shirley


McTaggart, Robert
Taylor, Mrs Ann(Bolton W)


McWilliam, John
Thomas, Jeffrey(Abertillrey)


Marks, Kenneth
Thomas, DrR.(Carmarthen)


Marshall, D(G'gowS'ton)
Tilley, John


Marshall, DrEdmund (Goole)
Torney, Tom


Marshall, Jim (Leicester S)
Urwin, Rt Hon Tom


Maxton, John
Varley, Rt Hon Eric G.


Maynard, Miss Joan
Wainwright,E.(DearneV)


Meacher, Michael
Wainwright,R.(ColneV)


Mellish, RtHon Robert
Watkins, David


Mikardo Ian
Weetch, Ken


Millan, Rt Hon Bruce
Welsh, Michael


Miller, DrM.S. (EKilbride)
White, Frank R.


Mitchell, Austin(Grimsby)
White, J. (G'gow Pollok)


Mitchell, R. C. (Soton Itchen)
Whitlock, William


Morris, Rt Hon A.(W'shawe)
Wigley, Dafydd


Morris, Rt Hon C.(O'shaw)
Willey, Rt Hon Frederick


Morton, George
Williams, Rt Hon A.(S'sea W)


Moyle, Rt Hon Roland
Wilson, Gordon (DundeeE)


Mulley, Rt Hon Frederick
Wilson, William (C'try SE)


Newens, Stanley
Winnick, David


Oakes, Rt Hon Gordon
Woodall, Alec


O'Halloran, Michael
Woolmer, Kenneth


O'Neill, Martin
Wright, Sheila


Orme, Rt Hon Stanley
Young, David (Bolton E)


Owen, Rt Hon Dr David



Palmer, Arthur
Tellers for the Noes:


Park, George
Mr. James Tinn and


Parker,John
Mr. Allen McKay.


Parry, Robert

Resolved,

That the Rate Support Grant (Scotland) Order 1982, a copy of which was laid before this House on 22 January, be approved.

Housing Support Grant (Scotland)

The Secretary of State for Scotland (Mr. George Younger): I beg to move,
That the draft Housing Support Grant (Scotland) Variation Order 1982, which was laid before this House on 22nd January, be approved.

Mr. Deputy Speaker (Mr. Bryant Godman Irvine): It may be convenient for the House to debate at the same time motion No. 3 on the Order Paper,
That the draft Housing Support Grant (Scotland) Order 1982, which was laid before this House on 22nd January, be approved.

Mr. Younger: Under section 1 of the Housing (Financial Provisions) (Scotland) Act 1978, I am required to estimate aggregate amounts of eligible expenditure and relevant income appropriate to authorities' housing revenue accounts, and to prescribe an amount of housing support grant equal to the deficit.
Before speaking in detail about the orders, I wish to place on record my appreciation of the way in which representatives of the Convention of Scottish Local Authorities have participated in the necessary discussions leading up to the grant determination. While there were certain areas, of course, where full agreement could not be reached—for example, in relation to reasonable levels of expenditure and local income—the way in which the grant is to be distributed substantially reflects the convention's suggestions, and I am grateful for the constructive approach which it has taken in these discussions.
On the variation order, hon. Members will recall that at about this time last year an order providing for housing support grants totalling £140.7 million in 1981–82 was approved. Having due regard to the most recent information on levels of interest rates, remuneration, costs and prices, we have decided to increase our estimate of eligible expenditure, and hence the aggregate of housing support grants by £21.2 million. That 15 per cent. increase in grants arises mainly from changes in interest rates.
The distribution of grant under the variation order adheres broadly to the principles laid down in the main 1981–82 order and approved by this House. Authorities will receive increases greater or less than the increase of about 15 per cent. in the grant total, depending on factors such as their relative loan charges per house and house numbers.
In the main order on the expenditure side, the main element is the calculation of loan charges, which account for just under 70 per cent. of our estimate of reasonable expenditure. Those are based on our estimate of mid-year debt in 1982–83 and we are now attempting to have closer regard than hitherto to the needs and circumstances of each local authority.
The other principal factor in determining aggregate expenditure is the amount to be allowed for management and maintenance. I am afraid that in the present economic climate we cannot allow more for 1982–83 in real terms than we did in 1981–82. The uprating from the 1981–82 settlement as adjusted by the variation order is 7 per cent. That figure takes into account the Government's view that local authority pay settlements next year should not, in aggregate, exceed 4 per cent. and also certain other factors affecting management and maintenance expenditure.
I shall now outline the decisions taken in relation to the estimation of aggregate relevant income for 1982–83. Apart from housing support grant, local authority housing revenue account expenditure is financed mainly out of rents and rates, or the local contribution as it is known, in the housing support grant context. The main factor in arriving at a level of total relevant income is, of course, the assumptions to be made on the increase in that local contribution. It is part of my responsibility for controlling public expenditure to determine an acceptable level for the local contribution; and especially to limit the effect of the rate fund contribution on total expenditure on local authority housing. I am interested in what happens to public expenditure, but only indirectly in local authority decisions on rents. We have, nevertheless, looked carefully at the implications of our policy assumptions for rents and have provided appropriate guidance to local authorities. I shall now outline the main features of this guidance.
It is essential to contain the rate fund contribution to housing revenue accounts, so my starting point has been that rents should increase by about £1·38 per house per week over the level recommended for the 1981–82 settlement of HSG. About a third of Scotland's housing authorities can manage with increases of that order, but for many authorities rents in 1981–82 fell short of the necessary level. That means that an average rent increase of about £2·20 per house per week will now be required over current actual levels. Such an outcome will have the effect of bringing back rate fund contributions to housing revenue accounts closer to the levels I indicated in the past and will bring the average Scottish rent to about £9·87 per house per week.
I believe that it will be widely accepted that a level of rent increase of about that order is reasonable, on any objective view of the assumptions that have to be made. In the first instance, those local authority tenants in receipt of supplementary benefit, who number about 150,000, will, generally speaking, not have to meet any of the increase. Additionally, about 250,000 local authority tenants currently receive a rent rebate. Of those, many will not have to meet any of the increase, and no tenant receiving a rent rebate will have to pay more than 40 per cent. of any increase. In other words, a rent increase at the average level of £2·20 would, at most, require someone on rent rebate to pay an additional 88p per week, and for very many people on low incomes the extra payment would be much less.
It must also be remembered that many local authority households have adequate income to meet the necesary increases. According to latest available figures, about 25 per cent. of local authority households have £9,000 or more a year coming in. Surely these people must bear their share of the cost of their housing. To ask others, who may be, and often are, in greater need, heavily to subsidise local authority housing costs for people with such an income is unjustifiable and unfair. The measures that I have outlined are aimed to avoid that.
The House will wish to note an interesting point of novelty in the debate. This year, for the first time, six authorities—Tweeddale, Nithsdale, Cumbernauld and Kilsyth, East Kilbride, Eastwood and Renfrew—are estimated to have an excess of income over expenditure. As a result of the amendments to housing support grant legislation introduced in the Local Government (Miscellaneous Provisions) (Scotland) Act 1981, those


authorities do not feature in the determination of grant this year. The aggregate expenditure of the remainder will be about £625,187,000 with total assessed income being £490,738,000. The total of housing support grants provided in the main order is therefore £134,449,000. The amounts of housing support grant to be received by individual authorities in 1982–83 are listed in annex C to the report. The House will, I know, wish to have an account of how this distribution has been reached.
Again, for 1982–83, the block of grant has been divided into a general portion and a hostel portion. On the general portion, the most important item is loan charges. I have already given some indication of how those have been calculated. To make the distribution as responsive as possible to changes in capital expenditure patterns, we now use forecasts of individual authorities' housing capital debts for that year. The other main component on the expenditure side of the formula is that on the management and maintenance of houses. Two refinements on previous years' practice have been introduced—separate standard amounts for supervision and management and for repairs and maintenance and two allowances for high-rise houses. In the first three years of housing support grant, the formula included an allowance for houses in sparsely populated areas. In agreement with the convention, it has been dropped from the formula this year.

Mr. Russell Johnston: Does the right hon. Gentleman agree that the amount of money spent on the sparsity element last year was only about £750,000, which was not a large sum? However, it was important. Will he respond to the feelings expressed by local authorities such as Skye and Lochalsh and Lochaber that he has let them down and allowed his policy to be determined by the larger authorities which do not understand the sparsity problem?

Mr. Younger: I appreciate the hon. Gentleman's point, especially as it concerns his constituency. The Government took careful pains to thrash out the matter with CoSLA. When it made known its strong and unanimous resolution that it wished that element to be discontinued, the Government raised the matter with it again to ensure that it had consulted properly and was sure of that view. We accepted the strong and unanimous view of CoSLA. In this case, I am happy to recognise that view. The hon. Gentleman might like to raise the matter with CoSLA.
Changes in formula of the type I have outlined for this year's settlement invariably bring about gains and losses, and it was agreed in discussion with the convention that the impact of losses should be cushioned by the application of a limit on the loss of grant per house of £150 when compared with 1981–82. 1 am glad to say, however, that no authority has suffered a reduction in grant large enough to bring this limiting factor into operation.
I believe that this settlement will meet the needs of housing authorities and their tenants in the circumstances in which we operate while protecting ratepayers from further increases in their contribution to local authority housing costs. I commend it to the House.

Mr. Bruce Millan: The Secretary of State made a very short speech. Normally, that would be a matter for congratulation, but not on this occasion, bearing in mind the importance of the subject and the fact

that this is one of the few opportunities that we have for a general debate on housing. There are many important matters that he did not mention, and I trust that some of those omissions will be remedied by the Under-Secretary when he winds up. Certainly, I intend to deal with some of the wider issues.
The right hon. Gentleman started by paying tribute to CoSLA for its co-operation in the negotiations involving the housing support grant. On the basis of the comments that CoSLA representatives made to us this morning, I can only say that that tribute is not reciprocated. CoSLA believes that there has been a lack of adequate consultation about the housing support grant—perhaps even more than about the rate support grant. Indeed, on a particular point to which I shall come later, it feels that it is being positively misled by Ministers and the Scottish Office. It is very bitter about the matter. That is part of the background to the debate, just as it was part of the background to the debate on the rate support grant.
Another part of the background is the disaster area of general housing. Housing has been singled out by the Government—for no reason that has ever been satisfactorily explained to the House and for no reason relating to the needs of people in Scotland—for the most savage reduction of all public expenditure programmes. The Shelter brief, which I think all hon. Members have received, gives some of the figures, comparing 1981 with the disastrous year of 1980 in terms of council houses started, houses approved for improvement, improvement grants in the private sector and so on. The situation is calamitous both in Scotland and in the United Kingdom.
A headline in The Guardian of 5 February reads:
Roof falls in on the building programme.
That is true in Scotland, as it is in England and Wales. The National House Building Council recently drew attention to the fact that less new house building is going on in the United Kingdom at present—private as well as council housing—than at any time since the end of the First World War—not the Second World War. That gives some idea of the calamity. In Scotland, hundreds of thousands of people still live in squalid housing conditions. That is a reproach to all of us, particularly when so few resources are being devoted to housing.
I want to say a word about the background to this debate, because it is relevant to what local authorities will be in a position to do in 1982–83 in regard to repairs and improvements. I refer to the calamity that faces many Scottish local authorities following the extreme winter weather that we had over Christmas—we must pray that it does not recur—and the considerable additional expenditure that they will have to bear, for which the Government are making no provision whatever in the housing support grant and the provision that they announced recently is inadequate.
When we debated this matter recently the impression was given by the Government that they were doing exactly what the Labour Government did—first under the circular issued in 1976, and then under the further circular in 1978. That is absolute nonsense. On those occasions, we were dealing not with damage to housing—in some areas there may have been some damage resulting from plumbing or burst pipes and so on—but with snow clearance, particularly in the north of Scotland, flooding in the southwest of Scotland and damage to roads and bridges. That was the basis on which assistance was given by the Labour


Government to the local authorities at that time. Incidentally, assistance was also given in other forms—for example, additional grants to farmers.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The right hon. Gentleman should reread the circular, if he has not done so. The circular makes it quite clear that the advice that was being given to local authorities—not just for the year in question but for future years—was that local authority property, not roads and the like, should be insured. They were specifically told that if it was not insured they would not receive any payment or help. When subsequently claims were made, not a penny was given for housing expenditure.

Mr. Millan: I shall come to the matter of insurance in a moment. I want to deal with what happened in those years on the basis of the circular that was issued in 1978. Figures were supplied to my hon. Friend the Member for Glasgow, Garscadden (Mr. Dewar) in a written answer yesterday. In both 1977–78 and 1978–79 we were dealing with snow clearance, damage to roads and bridges, and other expenditure. It was £4.2 million in 1977–78, and £4.5 million in 1978–79. All that expenditure was for the items that I mentioned, not for damage to housing. Thus, if there was not a parallel in 1977–78 and 1978–79—

Mr. Rifkind: What about the circular?

Mr. Millan: I shall come to the circular in a moment.
There is a direct parallel here with what happened on an earlier occasion under a Labour Government involving storm damage to houses in 1968. I have figures for what happened in Glasgow on that occasion under a Labour Government. The total expenditure there was £8.8 million of which, incidentally, no less than £6.4 million was spent on private housing, because the local authorities and the Labour Government took the view that if damage was done to a house, whether private or local authority, and had to be put right, it should be put right by the local authority and the decision as to who was to pay for it could be taken later. Out of the total expenditure of £8·8 million, I repeat, £6·4 million was spent on private housing. Some—not all—of that amount was recovered. Only £2·8 million was recovered out of the £8·8 million. The rates bore £½ million, but the Government bore the vast part of the expenditure—£5·5 million. If private houses are excluded more than 90 per cent. of the expenditure at that time was borne by the Government. That is the true parallel between the two situations.

Mr. Rifkind: What about the circular?

Mr. Millan: I shall come to the circular. The hon. Gentleman seems to think that this is a laughing matter. I have constituents who have been decanted for nine weeks without water. If the Government give no assistance to Scottish local authorities, many of those people will be out of their houses for a good deal longer. That is not a frivolous matter. It has to do not with circulars, but with the conditions in which my constituents and many others are living at present. The Under-Secretary of State is supposed to be in charge of Scottish housing, but his record is absolutely abominable. I do not expect him to treat the matter frivolously.
Whether or not local authorities were wise—they argue strongly that they cannot reasonably insure against many

aspects of housing expenditure—the decisions taken by the major housing authorities in Scotland have left them without insurance. We can argue whether that is deplorable. In some cases, it might have been prudent to take out insurance. I shall not argue against that. There is an element of special pleading here. It is legitimate to tell local authorities to be prudent and to consider insurance. However, the major authorities have not done that, whatever the circulars of 1976 and 1978 may have said. If they do not get some Government reimbursement, much of the improvement and repair work that has to be done—even normally—will not be done because the money will not be available as a result of the large sums that will have to be spent on burst pipes and so on.
At the time of the 1978 circular—which is more relevant than the 1976 circular—the authority in Glasgow was Conservative-controlled, not Labour-controlled. That Conservative-controlled authority presumably decided not to take out insurance, just as the Conservative-controlled authority in Edinburgh and the Scottish Special Housing Association—now under the Secretary of State's control—did not take out insurance. Whatever blame may attach to individual local authorities, there has been a disaster. Unless additional help is given to local authorities, many innocent people will suffer.

Mr. Younger: The right hon. Gentleman admits that his circular advised authorities to insure and that the big authorities have not insured. He is now suggesting that the Government should step in and pay the costs of those that have not insured. What effect will that have on the authorities that insured? Does the right hon. Gentleman suggest that we should return their premiums? If not, will it not be grossly unfair?

Mr. Millan: I think that it was said that about half the housing authorities had insured. However, it is by and large the small housing authorities that have insured. Nevertheless, there has been a calamity. Despite our arguments about the 1978 circular and whether authorities should have insured, we expect the Government to respond as the Labour Government responded in 1968.
In 1968, we did not even ask why private landlords in Glasgow had not insured against roofs being blown off. At the Labour Government's expense, most of the money was spent on privately-owned property in Glasgow. That may have been a gift to the landlords, but we thought that, as people were living in houses without roofs, the Government were obliged to respond. Therefore, the Government also have an obligation to respond today. They will regret it if they do not respond and open the door that the Under-Secretary of State seemed to open slightly during last week's debate. I hope that the Secretary of State will not try to slide out of his responsibilities. Whatever he may say about local authority extravagance, that has not caused this disaster. The Government have an obligation to help.
The order illustrates the Government's objectives on housing policy. They were determined to reduce revenue support for housing, and they have done so. At the same time, the Government are giving increased support to those with mortgages because of the disastrous interest rates that have resulted from the Government's economic policies. Therefore, the Government have not shown any evenhandedness. I sympathise with those with mortgages, because they are suffering under the Government's policy,


but they are at least being reimbursed through income tax rebates. While more money goes to the owner-occupier, the Government deliberately cut help to local authority tenants. That is part of a deliberate policy.
The second part of the Government's deliberate policy is to force up rents as high as possible. That is part of the effect of the order.
The third part of the Government's policy is to cut capital expenditure. The housing programme has been more savagely cut than any other public expenditure programme.
The fourth part of the policy is to force council house sales against the wishes of local authorities. It is humbug for Ministers to pretend that council house sales are desired in all areas and that every local authority tenant is equally interested in buying his council house. Some of us have taken the trouble to obtain information from our constituencies and know that such suggestions are misleading and hypocritical rubbish. Basically, the good housing stock is being sold and the local authorities are being left with the problem areas. That is a problem not only for local authorities but for existing and aspiring council house tenants.
The Government have used every shabby manoeuvre possible to achieve their ends, whether those ends are the forced sales of council houses or the objectives of this order. Under the order, the total grant to local authorities will be substantially reduced again. What are the figures? In 1980–81 the rate support grant was £228 million. In 1981–82 it fell to £161 million. In 1982–83 it will be reduced to £134 million. Those are at cash prices. When inflation is taken into account, the housing support grant for next year will be considerably less than half the grant for 1980–1. In that year also there was a real reduction in the housing support grant. There has been a reduction in crude terms and an even greater reduction in real terms in the amount of help given to local authorities.
The Government are trying to force up rents well beyond any level that could be justified by inflation. The rent increases that the Government seek in 1982–83—in addition to the increases of more than 30 per cent. that they have tried to force through in each of the past few years—are 29 per cent. That is well beyond any reasonable allowance for inflation. I can hardly credit the cheek and impertinence of the right hon. Gentleman when he asks people to accept 4 per cent. wage increases while he tries to force local authorities to increase rents by 29 per cent. It is apparent from the earlier debate that there will also be rate increases of more than 20 per cent.
The figures that have been used for the housing support grant are now utterly artificial and out of step with what local authorities are doing. Local authorities should make their own decisions on rents. They should do so in any circumstances and despite the penalties that the Secretary of State is once again trying to impose on them in this order.
Local authorities should take their own decisions in the interests of their tenants and not submit to the dictates of the Secretary of State for Scotland. The Secretary of State said, "There is no need to worry because most of them are on supplementary benefit anyway". If unemployment continues to increase, they will all be on supplementary benefit. It is an astonishing defence of what the Government are doing to say that people are on supplementary benefit, rent rebates, and so on. It is true

that if someone is on supplementary benefit and the rent goes up, it does not cost him a bean, but it costs the taxpayer a considerable sum.
What about the people at work, who are struggling on reasonable wages and are having to submit to 4 per cent. wage increases? They are paying 29 per cent. In many cases they are getting absolutely nothing by way of rent rebates and they are certainly not getting supplementary benefit.
The Government used to say "We want to look at the people who are working; we do not want the scroungers." The Government look on people on supplementary benefit as scroungers, but they are not even protecting those who are at work who are having to pay substantial rent increases as a result of the kind of housing support grant order that we have before us tonight.
The Government are using phoney figures for repairs, maintenance and supervision. The Secretary of State says "We are not making any increase in real terms; we are increasing the allowances only to take account of inflation." The figure for 1981–82 was completely inadequate, and next year's figure will be even more inadequate. The 1981–82 allowance for repairs, maintenance and supervision was only £226, but the local authorities budgeted for £253. Next year, under the new cash limits for 1982–83, the figure will be only £240, which will not even meet the figures for which local authorities have already had to budget for 1981–82. We are seeing repeated in the housing support grant order what we have already seen in the rate support grant order. What is put in the orders and the reality on the ground are entirely different matters but at the end of the day the artificial figures in the order put up the rents and the rates and are a penalty on council tenants or on ratepayers.
The effect of all this is that considerably less support is being given to local authorities each year under this Government. It means that certain authorities ace now falling out of grant altogether. It can be seen that authorities such as Cumbernauld and East Kilbride, with new towns within their area, would soon fall out of grant, but it has come as a big surprise to hon. Members that Renfrew has suddenly fallen out of grant altogether. Why has that happenened? According to the Secretary of State, Renfrew will have a surplus on its housing revenue account. That is not a real surplus; it is made up of all the notional figures that the Secretary of State puts into the orders.
If the Secretary of State keeps putting in notional artificially high rent figures and notional artificially low expenditure figures, what is happening to Renfrew this year will happen next year to a large number of authorities. This is only the start of a process that will eventually eliminate every local authority in Scotland from having housing support grant from the Government.
My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) will no doubt want to say something about the Renfrew problem. The problem is not that Renfrew has made a surplus on its housing account. It has a very considerable deficit, for which it is at present rating. Despite that, because of the use of these phoney notional figures—completely against the spirit of the original 1978 Act—Renfrew is now falling out of grant, and it is only the first of a long queue of authorities. Whether or not Renfrew has comparatively low loan charges because of the age of its housing stock, it is an absolute disgrace, in


the eyes of anyone who knows that district and its housing problems, that, on the basis of phoney formulae, it should not now receive any housing support grant whatever.
The Government are also distorting the capital allocations—not just the revenue allocations—because they have now begun to mix up what is happening on the revenue side with what is happening on the capital side. When the Labour Government introduced the housing plans, the idea was to get a realistic estimate for every local authority's housing needs and make a capital allocation on that basis. That was taking account of the existing private stock, the existing developments by housing associations, and the rest. The idea was that housing plan allocations should be based on need. If eventually it was decided that there was not enough money to pay every local authority what it wanted, in those unfortunate circumstances, although it did not happen under the Labour Government— [Interruption. ] Under the previous Labour Government, not one housing scheme was turned down. In any event, that is not the point that I want to make.
Once we begin to take the assessment of need and then make certain artificial deductions from that, we are inevitably introducing unfairness into the allocations of capital expenditure for district housing authorities, and that is precisely what the Government have done. They are doing it, first, by assuming that there will be large numbers of sales, that the expenditure on sales will be deducted from the original allocations, and that the authorities will be able to spend the additional amounts only if they achieve the necessary sales. But the sales that may be achieved in any particular area are absolutely nothing to do with the housing needs of the area, whatever else they may be. The capital allocations should be based on actual housing need, not on artificial deductions from it, because of the way in which housing sales in any year may fall out in one area as distinct from another.
As the best houses are going, it could be argued that the authorities with the biggest proportion of better houses will have the greatest amount from housing sales and will get the biggest capital allocation. That is absolutely against what should be done on the basis of need.

Mr. Rifkind: The right hon. Gentleman seems genuinely to misunderstand us. The figure is determined for each local authority in the way that the right hon. Gentleman would have done it. Within that figure, it is a question of the balance that has to be met by the local authority through its receipts from council house sales, as opposed to borrowing, which can be met by loan charges. The size of the allocation is in no way affected by the size of the receipts from council house sales.

Mr. Millan: The Minister has pretended that there is a £300 million allocation for capital in the forthcoming year. That has been reduced by £72 million, on the basis that there will be £72 million worth of sales. If those figures are not achieved, the figure will not be £300 million. If the sales are only £50 million, the figure will be about £280 million rather than £300 million.
That is not the only thing that has been done. The worst feature of all is the so-called rate fund contribution. The Government, in their desperation to get local authorities to put up the rents and not to allow local authorities any kind of decision-making in housing, are saying "Unless

you reduce your rate fund contribution by a significant amount, we shall make a further reduction from your capital allocations." Whatever we may think about rent levels and rate fund contributions, those ought to be matters for local authorities.
There is no justification—indeed, it is completely offensive in principle—for reducing local authorities' capital allocations because they do not obey the dictates of the Secretary of State in terms of rent and rate fund contributions. We find that absolutely objectionable in principle. Even worse than that, in 1982–83 it was done on the basis of, assuming a rate fund contribution of so much per head of population. That is an absurdity, as we pointed out in the debate on last year's housing support grant order. Even this Government seemed to be persuaded by CoSLA that it was an absurdity. A specific pledge was given to CoSLA that the Government would avoid the use of that formula in 1981–82, and would look instead for a standard percentage reduction in the rate fund contribution. Objectionable in principle though it may be, it has a certain element of fairness because it takes account of the position between one local authority and another. CoSLA was promised that that would happen.
In the event, when the allocations were made, the Government used no fewer than five different ways of making the deductions. The local authorities are rightly accusing the Government of a breach of faith and of going back on a specific pledge that was given on behalf of the Under-Secretary. The CoSLA representatives who were here this morning expressed the strongest personal criticism of the Under-Secretary and his officials for the breach of faith that took place on the formula.
Some authorities, including Glasgow, were caught out by what happened. What I find particularly offensive is that, the offence having been committed by the Scottish Office, it has the impertinence to try to put the blame on Glasgow district council when it lies fairly and squarely on the Scottish Office for dealing with the housing support grant in its usual ham-handed way.
I repeat that housing policy is a disaster for Scotland. The Government have done everything possible to penalise housing authorities and to dictate to local authorities how they should run their housing programmes. They are imposing penalties on local authorities, on the hundreds of thousands of council tenants and on the hundreds of thousands who aspire to live in council houses. They are doing it because basically they despise council tenants, and have always done so, and wish to do them the maximum damage. Council housing has made a massive contribution to the solution of Scotland's housing problems. We deplore the constant attacks on it by the Government. This is why we shall vote against the order.

Mr. Alex Pollock: I am pleased to have the opportunity to make a contribution to the debate. Earlier this year it seemed that I would have to make a speech highly critical of the Government. However, I am happy to inform the House and my right hon. Friend that, because of developments in recent weeks, I find myself in the much happier position of being able to give the orders a warm welcome. I should like to outline the sequence of events which has led to my change of view.
There was a meeting between the relevant Minister and CoSLA on 21 December when an indication was given that


the allocation for Moray district, with which I am primarily concerned, would be approximately £2,856,000, which works out at some £264 per house. Formal intimation was later given of a revised figure for 1982–83 of only £2,294,695, equivalent to £212 per house. The result was that Moray district council found itself facing a reduction in grant of approximately £562,000, equivalent to a loss of £52 per house per annum, or, to put it more simply, of £1 per house per week.
On receipt of that information, my concern was immediately conveyed to the Scottish Office. I am delighted to advise the House that the Under-Secretary of State felt able to respond swiftly to the representations that were made to him. He decided to delay laying the relevant order before the House. The matter was looked at afresh, resulting in a revised figure of £2,812,981, the sum mentioned in the order. That represents an increase of over £500,000 on the previously intimated figure. Needless to say, that has made the task of Moray district council a great deal easier. Accordingly, I should like to convey my warmest thanks and the thanks of my council and council tenants to my right hon. Friend and his colleagues in the Scottish Office— —

Mr. Millan: Get off your knees.

Mr. Pollock: —for showing this quick and sympathetic response to an acute problem. It would be less than gallant if I failed to do so.

Mr. William McKelvey: Could the hon. Member give some explanation of the inconsistency and say why three different figures emerged over such a short period? Like him, I have no great knowledge of how these formulae work. If he has the information, I should be grateful if he would impart it to me.

Mr. Pollock: I should dearly like to be able to help the hon. Gentleman, but I must confess that I find the allocation of housing funds to be one of the great mysteries of life. All I know is that we are now blessed with £500,000 more than we expected last month.
In regard to this year's rates, Moray district finance committee has made a recommendation for a reduction of 2p in the pound. That likewise I commend; I trust my right hon. Friend welcomes the decision. Perhaps we are fortunate in the north-east of Scotland that the ratepayers of Moray have not got councillors who aspire to the development of a Moravian foreign policy similar to the one that occupies much of the time of the good councillors of Dundee. Again, unlike Lothian region with its Lothian Clarion, they do not feel obliged to employ staff and use ratepayers' money to publish a news sheet to put forward the virtues of the council.
The Moray councillors prefer to let the facts speak for themselves. In this case, we have an illustration of the possibility in Scottish government of creating a good working relationship between a local authority and central Government, subject to the important proviso that each side behaves responsibly and accepts the proper role of the other.
I am fortunate to have in my area a district council which takes that responsible attitude. The illustration I have given to the House shows the capacity of the Scottish Office and its Ministers for a flexible and compassionate response. I therefore give a warm welcome to the orders.

Mr. Norman Buchan: The definition by the hon. Member for Moray and Nairn (Mr. Pollock) of responsible local authorities means those that are willing to kowtow to and accept the diktats of central Government. The interesting thing is that few of them seem to be responsible, because even the Tory local authorities in Scotland are trying to resist the Government's savage, malicious and in some ways malevolent behaviour towards council tenants in particular. It is part of the Government's general policy of a massive redistribution of wealth and well-being away from the ordinary people and the poor towards the rich.
The figures speak for themselves. I do not quarrel over the problem facing mortgage payers, especially the young ones. Local authority tenants receive support through the housing support grant and the rate fund contribution of £234 per capita per annum. For mortgage payers the comparable figure is £366. The bigger the house and the bigger the income, the bigger the tax rebate. The position facing council tenants is very different.
That is the reason for the horror expressed by local authorities and the sense of crisis that has developed in Renfrew district since the declarations and figures came out of the Government. I shall deal at some length with the situation in Renfrew, because it requires an answer and an explanation tonight. We see the consequences of the Government's actions particularly in relation to Renfrew, and I shall say why it is different from the other five local authorities that are being clobbered by the Government. Renfrew district council is suffering a 100 per cent. cut in housing support grant.
We must consider the matter against the background of the lowest concentration on housing by any Government since the war. The effect in terms of bricks and mortar, and therefore on the workers who put up the bricks and mortar, is as follows. The figures were bad enough in 1980, when only 2,800 council houses were started. That was the lowest peacetime rate since we began council housing. But in the first six months of 198 l only 1,100 were started—a figure 38 per cent. lower than in the equivalent period in 1980. In 1980 24,000 public sector dwellings were approved for improvement, again the lowest figure for a decade. Yet in the first six months of last year only 6,900 improvements were approved—almost 50 per cent. lower than in the equivalent period in 1980.
There has been a devastating effect both on the construction of new houses and on the modernisation and repair of houses, when one in four construction workers is unemployed.
Let us examine the problem that the Government have posed to my district authority. Two matters are worth stressing about Renfrew district. The first is the clobbering that the area has had in the form of unemployment in the past 12 months. In one town alone, Linwood, where Talbot closed, male unemployment is 40 per cent. There is deep distress in the area.
We were told that there should be a responsible relationship between local authorities and central Government. There must also be a responsible relationship between local authorities and those whom they have been elected to represent and protect. Against that background, the authorities are being penalised even more when they attempt to protect their communities.
It is no use telling me that local authority tenants are no different from others who have to receive support in the form of rent and rate rebates or supplementary benefit increases. That may be so, but I advise hon. Members to look at the general level of incomes in the Renfrew district. Incomes are low, but above the level at which that support can be given. Hon. Members should also note that not all those who deserve benefit receive it. One of the nastiest actions of the present Government is the way in which they have stimulated arguments about scroungers, so that people who become unemployed, as in the case of the 40 per cent. unemployment in my area— —

Mr. John MacKay: No.

Mr. Buchan: In one of my towns there is 40 per cent. male unemployment, so I do not want any such comments from Government paid hacks.
We all know that the take-up of benefits is low, that those who deserve them do not always take them. About £500 million a year in supplementary benefit is lost, with a take-up of probably around 75 per cent. That means that one in four is not receiving what he needs. That is the background of the Government's behaviour towards Renfrew district council.
The Government argue that they will add two sets of figures together and that if they get a deficit or a surplus they will behave accordingly in relation to grant. The trouble is that the two sets of figures do not add up, because one set happens to be real figures and the other is a set of notional figures. The effect upon Renfrew district council stems from that entirely, because along with the notional figures—the deemed rate support, the deemed rent figure—is the actual figure of the loan charges.
Why is Renfrew different from the other five district councils? The arguments should be advanced for the others too, but we have a special case. However, I see no reason why Tweeddale, Nithsdale and Eastwood should not also be involved. The distinction is that none of the others has major council tenant housing. In Renfrew district 52 per cent. of the housing stock consists of council houses. There is a vast difference between whoever it was who marched in the song and Tweeddale and Eastwood.
As the one real figure is the loan debt and the other two are notional figures, it is the loan debt that has caused Renfrew to be excluded from any housing support grant. There are various reasons why there should be a low loan debt. One is that much of the housing stock consists of older houses. Some were built towards the end of the First World War and then were taken over by the council. I am told that in these one can sit on the lavatory seat and take one's dinner off the kitchen table. For years we have been trying to raise the money to have those houses modernised, but it still has not been done. These are not in a poor village but in one of our good villages—Inchinnan.
The housing stock was provided at different times. Older houses were built at lower cost, but, because they are older houses, they are more in need of expenditure on modernisation and repair. It is also partly that there may have been different policies applied as to the types and extent of expenditure that had been borrowed for, or indeed different methods of paying back the debts. But

none of this is taken into consideration as far as we can see by this Government. They have not properly analysed the reasons for this low debt.
We believe, and the council believes, that there should be further investigation as to how these debts came about, and indeed CoSLA to some extent went part of the way and achieved some success in getting the Government to alter their method of working this out.
The effect of the low loan debt and the resultant low loan debt charges is taken together with the deemed amounts of the further items of income and expenditure, including the sale of council houses. The Government are doing two things. First, they are clobbering house building and at the same time they are encouraging the selling off of council housing, the best stock, leaving more and more of a drag and a drain on the older houses that have to be paid for in maintenance and repair. What a form of management. I thought that the capitalist supporters were in favour of intelligent financial management. What a ludicrous proposition that is.
The effect of this is that notionally the council's housing revenue account is £2.5 million in deficit. This is too low to justify central Government assistance, and accordingly we get no support grant. But of course this reflects the older houses, the little modernisation we have had, because among other things Renfrew was particularly generous in assisting in the Glasgow overspill provision. We had two problems; we had to assist in the Glasgow overspill, for instance in the town of Johnstone, and we had to participate in the building up of a new town, the town of Linwood. So there were problems because of the amounts we had to take on.
It is so unjust. If the notional figure of rents, which is deemed to be £500, had been estimated at £490—in other words, £10 a house per year less—the deficit would have become something of the order of £400,000 and the council would therefore have been entitled to a substantial housing support grant of £600,000. So the fact that the Government arbitrarily fixed a notional £500 rent of itself deprived us of a £600,000 grant that we desperately need. This is nonsense and it must be altered, and I want some answers as to what they based this on.
On the other hand, if those low debt charges reflected a past policy of meeting expenditure from revenue, or a more intelligent form of repayment, which more rapidly reduced the loan debt, it surely is not reasonable that present ratepayers and rent payers should be penalised by being deprived, through the loss of the grant of the lower expenditure generated by having incurred higher expenditure levels in the past. The present generation of rate and rent payers are being penalised because rate and rent payers in the past were paying at a higher level to clear the debt more quickly. The other thing is the theoretical housing revenue account surplus of approximately £290,000, which is a tiny figure compared to the real scale of expenditure and income.
The next point, quite apart from the cost to the tenants—and I am going to look at some of the cost figures in a moment—concerns the effect that this will have on the capital housing programme, because unbelievably the whole thing is linked to the effect on capital expenditure on housing. If we do not go along with the Government's policy regarding rates, our capital allocation is clobbered. For the year 1982–83 there has been a provisional consent to £9·5 million given to the council, of which £3·2 million is calculated to be covered by receipts from sales of


council houses, leaving £6·3 million as a net allocation from Government. Therefore, we are likely to be able at least in theory to embark on a capital programme that would involve a cash outlay of £9·5 million, offset by £3·2 million of capital receipts from council house sales. In the first place, the £9·5 million allocation is totally inadequate when compared with our housing financial plan of £13·2 million, which has already been notified to the Scottish Development Department as part of the Department's financial planning structures and system. So the first point is that it is seriously below our estimated needs.
The policy of restricting local authority expenditure, relating the capital expenditure to revenue expenditure, will be permitted only if the council rates fund contribution to its housing revenue account does not exceed £2·5 million. To the extent to which the rate fund contribution goes over the £2·5 million, the £6·3 million will be reduced. The consequences of this are that if we project a rate fund contribution for 1982–83 without a rent increase, which would of course diminish the rate fund contribution, of £9 million, so that the excess of £9 million over the target of £2·5 million is £6·5 million, that will completely wipe out the net allocation of £6·3 million. In order to obtain that net allocation in full rents would have to be raised from 1 April this year by £3·37 per week. That would be required to make these figures tally, or expenditure on repairs and maintenance would have to be reduced and rents raised to achieve that sum per house.
So the district council's present annual average rate of £374 would have to be increased to £550 per annum—a 47 per cent. increase. Most likely it will aim at a compromise, and if the district were to aim for the housing support grant notional rent per house of £500 that would mean a 34 per cent. increase in rents from 1 April, plus a residue in capital expenditure of some £2 million. Rent increases of that magnitude are totally unacceptable also because virtually all would come from a cessation of house building and vast cuts in the repairs, modernisation and maintenance that are needed. That is a false and stupid economy.
If we do not go along with it, the consequence will be that any capital allocation might be cut. A total of £4.2 million will be spent in the coming year in respect of our existing legal commitments. We are legally bound to spend £4.2 million. If we do not receive any allocation above that which we need to meet our legal commitments, the effect will be disastrous. We would be unable to issue any new contracts for new houses or modernisation schemes, and housing action area programmes would stop completely.
One of the problems is that pledges of intent that have been given to tenants will now have to be broken. I have already described how the kitchens and lavatories are located side by side. I have already given those tenants the pledge I received from the council that the houses will be modernised, starting in April this year. Now we shall be accused of a breach of faith because of the behaviour of this disastrous Government.
I want some answers about the Renfrew position. Above all, the Government must rethink the matter. They cannot throw together one notional set of figures and one actual set of figures without, at the very least, analysing the nature of the actual figures—the loan charge figures. The reductions arise almost entirely from the low level of loan charges. That is absurd, because there is no connection between those figures and the needs.
By cutting the housing support grant, forcing up rents and rates and clobbering those areas that are trying to introduce an element of fair income redistribution, the Government have ensured that the areas most in need of repair, maintenance and new housing will be prevented from obtaining them. It is a stupid and malicious policy, and I wish that the Govermnent would chuck it.

Mr. Barry Henderson: I am sure that the hon. Member for Renfrewshire, West (Mr. Buchan) will forgive me if I do not take up the local aspects of his constituency experience that he mentioned.
"Redistribution of wealth" has long been one of the cries of the old Left. There are various definitions of that phrase. One concept is of a Robin Hood type operation, where one takes from the rich and gives to the poor.

Mr. William Hamilton: It never happens.

Mr. Henderson: The hon. Member for Fife, Central (Mr. Hamilton) approves of that concept. As a fair man, the hon. Member for Renfrewshire, West will accept that, in practice, when a policy of redistribution of wealth has been tried, the net result has been that one takes from the rich and poor alike and gives to the bureaucrats.

Mr. Buchan: Give me a chance.

Mr. Henderson: Not on your life.
In a wider vein the hon. Member for Renfrewshire, West asked whether rents were fair and reasonable and referred to the balance of subsidy between council tenants and owner-occupiers. As far as I can make out, the average council house rent in Scotland is about £4 a week less than it is in England. Therefore, taking one measure of comparison, we see that the order is favourable to our constituents.
The other measure must be the relationship between typical earnings by typical council house tenants and typical rents. No doubt the Minister has the precise and up-to-date figures. I suggest that the average male manual income is about £143 a week. The average rent proposed after this year will be about £9 a week. That does not seem to be a wholly unreasonable balance between potential income and potential rent.

Mr. Neil Carmichael: Is the hon. Gentleman willing to attend meetings other than those of his constituents and suggest that the average take-home pay is anything approaching £143 a week') From where did he get his figure? I know that the Department of Employment issued a figure like that for the average wage, but it was speaking of industrial workers, working all week, without holiday or sickness. The hon. Gentleman is using an artificial figure.

Mr. Henderson: No doubt my hon. Friend will give us the authorised figures. I think that the way that the hon. Member for Glasgow, Kelvingrove (Mr. Carmichael) expressed his question to me showed that there is a broad average.

Mr. George Foulkes: Where did the hon. Gentleman get that figure?

Mr. Henderson: I accept that not everybody earns that kind of money or has that kind of income. Surely that Ls why about half the council house tenants do not pa) rents,


or have substantial rent reductions. That is right and proper. We should be in the business not of subsidising bricks and mortar but of ensuring that everyone should have the opportunity to have a decent house, and that in doing so those who can afford to pay should pay the price for that house. Those who cannot pay should be assisted by the rent and rate rebate schemes which were introduced originally by a Conservative Government.
The other matter raised by the hon. Member for Renfrewshire, West concerned the subsidy as between private and public sector house-occupiers. As far as I can make out, the amount of subsidy to the public sector tenant is about the same, perhaps a little more now, as it was when the previous Labour Government left office.
What is also interesting is that the figure of the subsidy, which is almost £300, taking into account rent rebates, compares with average relief on mortgage tax relief and option mortgage schemes per owner-occupier of about £170. On that basis the council house tenant is not necessarily in a bad position.

Mr. Buchan: Will the hon. Gentleman repeat those figures and give us the sources so that we can get them right?

Mr. Henderson: I cannot tell the hon. Gentleman what the source is.

Mr. R. McTaggart: The figures are confidential.

Mr. Henderson: Not at all. It is merely that I have made some notes, before coming to the Chamber, on some figures that I came across. I can assure the hon. Gentleman that the source was impeccable.
In 1978–79 the average subsidy per tenant, including rent rebate, was £253, in 1979–80 £358, and in 1980–81 £391. The estimate for 1981–82 is £376 and for 1982–83 £295, By this means, I came to the figure that I originally mentioned of a marginally greater subsidy this year than in 1978–79. These are the figures for which the hon. Gentleman asked.
A much more important point—

Mr. Buchan: Is this also an impeccable source?

Mr. Henderson: —to which the right hon. Member for Glasgow, Craigton (Mr. Millan) referred was the question of burst pipes, damage, insurance and so on. I listened this afternoon to an eloquent plea from a representative from Glasgow district council who said that Glasgow—he was quite honest about this—had calculated that it would cost more to insure over a number of years than to take the risk of experiencing a bad freeze that might require payments to be made. It seems to me that Glasgow took a calculated risk. When a calculation goes wrong, one does not go whining to the Secretary of State.
What worried me was whether Glasgow had made its calculations on correct figures. The representative of the council said that the council thought that it would cost £7·5 million to insure against burst pipes. There are, I understand, 150,000 houses in Glasgow. If the average value, for the purposes of insurance, is £25,000, the total value of the housing stock would be about £3·75 billion. That is a great deal of money. I would have though that

one would want to take some protection to insure against any disaster that might occur to such a substantial investment.

Mr. Buchan: In view of the success of my last intervention, I should like to put another question to the hon Gentleman. The argument relates surely to the recent storm damage suffered in Glasgow and elsewhere. I suggest that the hon. Gentleman looks back to the period when there was massive storm damage in Glasgow, during which 70,000 roofs were blown off. As a Minister in the Scottish Office at the time, I recall that we willingly paid for the damage. The success of that policy has been shown. If the hon. Gentleman consults his hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie) he will be told how helpful public support can sometimes prove to be.

Mr. Henderson: I was not a Member at the time of the storm damage in Glasgow some years ago. I am concerned about what happened this year. The chance of frozen pipes in Scotian during the winter has to be expected. The representative of Glasgow district council told me this afternoon that Glasgow had decided that it would be better financially for the council not to insure rather than to insure. I was worried that he appeared to have made his assumptions on the basis that the cost of the insurance would be £7·5 million. I do not know how those figures or quotations were obtained.

Mr. Buchan: An impeccable source?

Mr. Henderson: If it is right that the value of Glasgow's housing stock is £3·75 billion, and if insurance was obtained, as I know is the case in other district councils, to cover burst pipes and also storm and tempest, at a penny per £100, the premium for the whole of the city of Glasgow would be only £375,000. I do not know where Glasgow got the figure of £7·5 million. I hope that it did not base its calculations on false assumptions.
The council took a calculated risk, which has been openly admitted, that it might cost it more over the years to insure against the damage than to pay for it once in a while when it arose. It was the council's privilege to make that decision. It seems rather unfair that, when other local authorities take a different calculated decision and decide to pay the insurance premiums, they should then lose the possibility of receiving money from the central pool of resources available for local authority housing. That money would go instead to paying the local authorities which knowingly and calculatingly undertook not to have insurance. How many people take out endowment life insurance in the hope that they will die so that it may be collected?
The important aspect of the order is the assumptions made about sales of council houses. I am glad that the Minister has made the changes, because those authorities that have shown willingness to encourage the sales of houses to their tenants will have an opportunity, if they sell more than has been assumed as a Scottish average, to receive new resources to help in the development of new housing and to meet 'particular needs.
The Opposition have told us often that only houses in good areas will be sold. That has not been the experience of most authorities so far. It is certainly not the experience of the two district authorities in my constituency. Kirkcaldy district council, a Labour-controlled authority,


and North East Fife district council, a Conservative-controlled authority, have found that there is no common factor in the type, age, or quality of house that affects their sales.
One matter that has bedevilled Scottish housing for many years is the number of voids—houses unlet—which is especially serious in the cities. Houses that were extremely difficult to let have not always proved difficult to sell. Once they have been sold to owner-occupiers, the areas into which tenants have been thrust almost unwillingly begin to rise in the esteem of the population generally, which has been of great benefit to the housing stock. One must recognise that the policy of the sale of council houses—to give the tenants who wish to buy an opportunity to own their home—has not only been welcomed by the tenants but has been of great benefit to the improvement of the housing stock and will be even more so in the future.
I hope that my hon. Friend will consider the fact that there has been a move to define categories of housing that would receive consideration under the housing support grant formula. Perhaps we should go a little further in that direction. In Scottish housing now some areas of need are much greater than others. In my experience that includes Shelter housing—housing that is suitable for single persons. Perhaps we should consider adjusting the formula of the housing support grant to ensure that taxpayers' money would go to those much-needed schemes.
I ask my hon. Friend the Minister whether it is possible, within the traditional and customary practices of the management of public finance, to allow district councils to plan a little further ahead than in the past. Often it would not be excessive for it to take at least three years from inception to completion of a housing project and the handing over of the keys. That is a long time if one is catering on an annual basis only for the known finance. I hope that in future it will be possible to give councils a clearer indication of finance. Two years ahead would be of considerable help. One year ahead is not enough. If councils could look further ahead, we could expect more efficient use by local authorities of the funds available to them through the orders.

Mr. William Hamilton: My hon. Friend the Member for Renfrewshire, West (Mr. Buchan) and the hon. Member for Fife, East (Mr. Henderson) referred in general terms to the redistribution of wealth in the context of housing. I agree with the hon. Member for Fife, East in admitting that no Government since the end of the war have made a great impact on the redistribution of wealth. However, the most successful Government since the end of the war in terms of doing that have been the present Government. They have actively redistributed wealth from the poor to the rich. They have done that successfully over the last two and a half years. It is in that context that I want to examine the problem that we are debating tonight.
Like many other hon. Members, I am a little shy of bandying about the statistics in the formulae in the orders. One of the best and measurable ways in which wealth has been distributed and redistributed in favour of less well off people since the last war has been in the public provision of housing, health services and education services. The Government are being condemned, rightly in our view and in the view of the great majority of ordinary people up and

down the United Kingdom.. for doing the opposite in the three areas that I have mentioned. To use a horrible word, they have been privatising the provision of housing, privatising the provision of education and privatising and encouraging the provision of private hospitals and all sorts of private health services.
Like many ordinary people in Scotland as well as England, many hon. Members, such as my hon. Friend the Member for Central Ayrshire (Mr. Lambie) do not understand the intricacies of what we are debating. Neither do 1. However, I understand the general propositions. Ordinary people do not understand and are not interested in the intricacies of what we are debating. What they are interested in is how much rent and rates they will have to pay, how the electricity bill to heat the house will be paid and how they will keep on their jobs so that they can pay those costs. Those are the problems that are disturbing every citizen up and down Scotland and elsewhere. They know that those costs must be met. They cannot avoid them. They know that they have an uncertain wage coming in week by week.
The hon. Member for Fife, East talked about average earnings of £143 a week. I dare him to go on a platform in East Fife with me and to say to the people that they are all well off and earning an average £143 a week. They are mostly farmworkers in his constituency. He dares to come to the House and say that people earn such money in Fife or anywhere else.
Of course, the average can prove anything. If a fellow catches a train at 9 o'clock in the morning, is at the station one minute to nine three days of the week and one minute past the other three days, on average he catches the train every day. That is the falsehood of using averages. The Government's purpose on housing policy has always been very clear. It is a nefarious policy that compels local authorities, in the interests of a property-owning democracy, to sell their best council housing. The hon. Member for Fife, East referred to the Kircaldy district council. Has he got its figures showing how many houses it sold and where they are being sold?

Mr. Henderson: I have not got those figures with me tonight, but I received figures from the council which show exactly what housing it has sold and its conclusion that there was no discernible pattern of houses to any particular type or area.

Mr. Hamilton: The Kircaldy district council does not want to sell houses because it has so many people on the waiting lists. The Government are not contributing a single house to help solve its problems. The same applies in every other area where there are housing shortages.
The Government will force councils, with financial penalties, to sell houses if they do not want to. That is not being done in the name of freedom of choice. There is no freedom for a democratically elected local authority. It does not have the choice because it is mandated by its local electors not to sell houses. However, the Government dictators in Dover House and St. Andrew's House say "Whether you, as elected representatives, like it or not, you must sell houses."

Mr. Rifkind: To the tenants.

Mr. Hamilton: Of course to the tenants, but mandated elected authorities should have the freedom and right to, determine their housing policy. That is the basic and fundamental principle of local government.

Mr. John Home Robertson: Whatever evidence there may or may not be from the Kircaldy council, I assure my hon. Friend the Member for Fife, Central (Mr. Hamilton) that the East Lothian council has ample evidence that the majority of houses sold under the scheme are the most desirable. It is those houses in small villages and on the East Lothian coast—the better quality and more modern houses—that are going. Therefore, those on waiting lists must move into the lower quality houses in due course and will have to wait longer.

Mr. Hamilton: Common sense dictates that that must happen. Given the facts of the situation, it stands to reason, when a person is living 16 storeys up in a high-rise block of flats, that he will be less willing to buy than if he were living in a semi-detached house with a back and front garden.
The Government are also forcing up rents and rates to intolerable levels. Whether a local authority likes it or not the Government lay down what the rent increases shall be and, at the same time, say, "We shall restrict the wages of those paying the rents to not more than 4 per cent." The rents and rates are increasing far more than that.
Therefore, the Government say "We shall discipline you on wages coming in and rents and rates going out so that we have an incomes policy based on the discipline of fear; fear of the dole queue, fear of the rent man, fear of the electricity bill and fear of everything.
From experience of travelling round the surgeries in my constituency, I know that there is fear, wonderment and anger about how the local authority is to meet its week by week outgoings, not knowing whether the work force of a factory will be given 24 hours' notice. Workers are being thrown out on their necks almost every week in Scotland.
Reference has been made in these two debates to the all-party gathering with CoSLA this morning, It was an interesting exercise. I felt like saying to the Tories "It serves you right, because you all voted for that woman, you all voted for a Tory Government, and you have got what you asked for". Or did they? Were they conned?
Certainly, the figures that we were given by the representative from Perth and Kinross were very interesting. I remember going to the last local district council elections when that council was fighting two or three years ago. The Labour candidate who, incidentally, won the election, showed me an advertisement that the council had inserted in the local paper to conform with this Government's economy drive at that time. It concerned rat catchers, who in future were to be a charge on the private individual. The local authority would no longer provide the rat catcher. It said that in future if people had rats they had to sort them out for themselves. The chap this morning said, "We showed that we were bending over backwards to accept the edict of our Tory Government by putting the rat catching out to private enterprise". Freddie Laker would have made a good rat catcher. That is the kind of policy that that authority was pursuing. Nevertheless, it said that it was being clobbered by this Government as a result of these rate support grant and housing support grant proposals.
The Government are advocating increased rents for 1981–82 to 1982–83 of up to £9–59 a week. The rents in the authority of the right hon. Member for Western Isles (Mr. Stewart) are going up nearly £12 a week. I wonder what the average pay is in the Western Isles? Is it £143 a

week? In Shetland the rent increase figure is £10·77 and in Glasgow £11·34. The representative of the Perth and Kinross authority told us this morning that it put up its rents last year by £2·65 a week, this year they are going up by £2·85 a week, and that in future all new houses built in that area will be financed, and must be financed under these proposals, wholly by the tenants. For every new house that is built in that area, the rent of every tenant will go up by 50p a week.

Mr. Bill Walker: rose—

Mr. Hamilton: No, I shall not give way. The hon. Gentleman should have been there. He should have listened to those people, because they spelt out these matters. I assume that the hon. Member, who represents that constituency, will vote in the Lobby tonight in support of the proposals that were condemned by his own representative who met us this morning. We heard that the average rent there now is £12 a week, and that is a low wage area.

Mr. Walker: rose—

Mr. Hamilton: I shall allow the hon. Gentleman to intervene on condition that he tells me that those people in his constituency who earn £143 a week will be well able to pay £12 a week. How many of his constituents are getting £143 a week?

Mr. Walker: I cannot give the hon. Gentleman the precise figure because I do not have it. But there is no shortage of people who wish to take up housing lets in Perth and Kinross at the rents that the authority charges. There are two reasons for that. Those who cannot afford to pay the rents receive substantial help from the Government, and those who can afford the rents pay them.

Mr. Hamilton: The hon. Member for Perth and East Perthshire (Mr. Walker) should have a good talk with the representatives who visited the House today. [Interruption. ] I am giving the facts as he gave them to us this morning. The facts are undeniable.
From now on the burden of public authority housing will be put wholly on the tenants and taken away from the taxpayer. That is the whole purpose of the Government's housing policy. In future local authorities that want to build houses—there are 160,000 people on the waiting list in Scotland—will have to sell some houses first. That is the only condition on which they will be allowed to build. From April they will be able to borrow for new building only if the income from house sales is satisfactory not to the local authority, but to the Government. A quarter of all capital allocated to local authorities for house building will have to come from the cash obtained from house sales. That policy makes absolutely no contribution to the enormous housing problem that still faces Scotland. That is why the policy is being bitterly attacked by all parties in Scotland—the Labour Party, the Tory Party, the Liberal Party and the SNP. We heard that this morning. It could not have been clearer. My hon. Friends have also quoted Sandy Mutch. The Government's policy is breathtaking in it mendacity, its manifest injustice and crass ignorance of the real housing problem facing Scotland.

Mr. Gordon Wilson: One of the interesting aspects of this debate is the scale on which housing subsidies are being withdrawn. In common with


many other hon. Members, I received the survey from Shelter which shows that in real terms the cut is about £23·1 million, or about 15 per cent., which compounds the drastic 33 per cent. cut made last year. If so, the burden borne by the public sector is substantial. The scale of the cuts is breathtaking to the local authorities that have to implement them and to the tenants who have to pay the higher rents resulting from the cuts in housing support grants.
I want to concentrate on the six councils that have been excluded from grant. Do the Government intend to phase out housing support grant altogether? If, as has been suggested, the six councils are joined next year by another four or five, and so on, we may end up with no housing support grant at all and with tenants bearing 100 per cent. of the housing cost. That could go further. In certain circumstances, tenants could find themselves contributing towards the general revenue costs of the local authority and consequently subsidising the ratepayers. That would be a remarkable inversion.
The Minister must come clean with the House tonight. He must let us know whether the Government intend to remove the housing support grant. There is great suspicion that that might happen.
The director of housing for Dundee district council told me this morning about the situation. He said that it was very difficult for the council to guess what the Government's policies might be. If they intend to take away that support over a period, but are not prepared to admit it, the uncertainty will continue.
My second point relates to the philosophy behind the changes made by the Government. The hon. Member for Fife, Central (Mr. Hamilton) rightly said that the Government are clearly involved in some redistribution of wealth. Those Government supporters who pay interest on mortgages and receive tax relief should know that the logic of the Government's actions will inevitably lead to the removal of that relief. The Government seem to have started in the public sector by stripping away the housing support grant bit by bit until it reaches a minimum level. Once they have done that, they will be able to provide the rationale for removing all or part of the Treasury subvention to those who are buying their homes. Therefore, those who have been supporting the Government should carefully consider what has happened and impress upon their Members of Parliament that they would be very worried if they suddenly found that their tax relief had been taken away. In the same way, council tenants are worried about the way in which their rents have been jacked up.
There are proportionally more council house tenants in Scotland than in England. It is often pointed out that the subsidy given for housing in Scotland is far greater than that given in England. However, it is forgotten that the tax subsidy towards house purchase is greater in England than in Scotland. The changes that are being made without any corresponding reduction in tax relief on mortgage interest will lead to a widening gap between Scotland and England. We must keep an eye on that.
Hon. Members should direct their attention towards those who do not pay all their rent and who receive some assistance. There is an article in one of today's newspapers that suggests that because higher rents are payable in England, arrears are beginning to accumulate. Perhaps the

situation in Scotland should be examined before we find that the Government's policy on high rents leads to a similar situation.
Even if those who are unable to pay their rents receive help through social security contributions, they will still have to pay the higher charges for fuel and food. This year, in particular, the payment of fuel bills will be difficult for many ordinary families, especially those in which the breadwinner is unemployed. That is also true of those who work but who do not receive the high wage of £143 that has been mentioned. This year and last year wage increases have been restricted while inflation has surged ahead. Low wage earners have had to face increased rents. In addition, the cost of food and of clothing children has increased. Therefore households with inadequate funds face substantial pressure, particularly when they seem to be hemmed in by rising prices.
I turn to the impact of the Government's policies on the capital available for new build and modernisation. The debate has concentrated on rent levels, but over the past year there have been more and more complaints about the shortage of new houses and the lack of modernisation. Modernisation schemes are being pushed out of sight or into infinity. The Government have not considered that problem properly. The innovation of withdrawing capital, because of an overspend on revenue account, together with the clawback from the previous year, means that many local authorities face a lack of adequate capital to meet the pressing need for housing. That is true particularly in terms of modernisation, because it had been accepted policy among all parties for a long period that a better investment would be for more resources to be put into housing to safeguard and build up the existing stock.
Unless we are careful, some housing estates may slide downhill simply because environmental or other housing improvements cannot be made. It is easy for that sort of situation to start, as many of us know, but it is difficult and extremely expensive to put it right once it occurs.
I ask the Government to think again about the capital allowance that was raised four or five years ago—in terms not of vast new building programmes but of specialised buildings for old people and more houses for the disabled or to fill gaps in the housing stock of each local area.
We must talk in terms not only of improved quality of housing, but of quantity. If the availability of capital from the Government to local authorities declines, obviously the quality of our public sector housing stock is also likely to decline.
What the Government have done by making two substantial reductions in the housing support grant over the last few years has been bad. It will put tremendous pressure on the available housing. It will also have a substantial impact on jobs in the building industry.
There has been much talk of the unemployed 25 per cent. of building workers. In Dundee at present about eight in 10 building workers are unemployed. That is a very high figure. If the Government want to reduce unemployment and get the economy going again, one of the quickest ways to get more people back to work in worthwhile activity and to improve the quality of life is by greater investment tn public sector housing. The Government could turn on the tap almost immediately and provide new jobs. The Minister must look at this aspect again.
We all know that the Scottish Office team is unable to put pressure on the Treasury. It is the slave of the Chancellor of the Exchequer. It has no influence whatever


on the Government. Time is running out. If the Government do not understand and that one of the basic decencies of life is the housing of our people, let them consider their future at the next election.

Mr. Dennis Canavan: The order represents yet another savage attack by this Government on the living standards of thousands of council house tenants throughout Scotland. As has been pointed out, the cut in real terms is over £23 million, or 15 per cent. That is over and above the 33 per cent. cut that we suffered last year.
I should like to reiterate the point made by the hon. Member for Dundee, East (Mr. Wilson), that the Government seem hell-bent on phasing out the housing support grant altogether. Six Scottish local authorities are not receiving a single penny in housing support grant under the terms of the order for the financial year 1982–83. One of those local authorities lies partly within my constituency, Cumbernauld and Kilsyth district council. It has 4,363 council houses, most of them in my part of the district, in Kilsyth itself and in surrounding villages such as Queenzieburn, Kelvinhead and Banton.
Kilsyth set an example to the whole of Scotland. The town council in Kilsyth was one of the pioneers of council housing in Scotland. Even before the war good quality public sector housing was built on such a scale and to such a high standard that people from all over the country visited Kilsyth in order to see that model town with such good quality council housing. Yet now we have a Government who are taking out the hatchet to destroy much of the good work that was done by the Labour pioneers on the old Kilsyth town council. The district council will not get a penny in assistance from the Government if the order goes ahead.
Conservative Members are fond of telling us that council house tenants are over-subsidised anyway. That is the thinking behind the housing support grant order. The Government are trying to reduce the subsidy and possibly phase it out altogether.
I am glad that hon. Member for Fife, East (Mr. Henderson) is back in the Chamber, because he was quoting from some unknown source—he claimed that it was impeccable—for the levels of subsidy. I question his figures. The estimates that I have for 1982–83 come from Shelter, which is probably a more impeccable source than that of the hon. Member. The average support given to council tenants through housing support grant and through the rate fund contribution is £234·60 per head, yet the average subsidy or tax relief given to people with mortgages is £366·70 per head. In other words, council house tenants are getting less by way of subsidy than people with mortgages are getting.
I live in a council house. I sometimes hear Conservative Members saying that people such as myself should not be living in a council house and that we should not be getting a subsidy. I would get a higher subsidy if I were to take out a mortgage. There are many people on low incomes living in council houses. The average income of families living in council houses is considerably lower than that of people living in private houses. I am not against people in the private sector getting some form of subsidy by way of tax relief, but surely, if we are to be equitable, the greatest

help should be given to the people most in need. The figures that I have quoted show that the very opposite is happening. People in council houses are getting less subsidy per head than the people with mortgages who are living in the private sector.

Mr. Henderson: I said that my figures included rent rebates. I suspect that the hon. Gentleman's figures do not include rent rebates. In that context, is it not the case that rent and rate rebates ensure that those least able to pay are able to meet their rents?

Mr. Canavan: I shall be coming to rent rebates in a moment. It is some time since the hon. Gentleman's last contribution. Perhaps before the end of the debate he will intervene in someone else's speech in order to tell us the source of his figures.
The cuts imposed by the housing support grant order will mean further rent increases. There will be an average rent increase throughout the whole of Scotland of £2.20, or 29 per cent. That is over and above the recent massive rent increases which council house tenants have already suffered. Since the Tory Government came into office in May 1979, council house rents in Scotland have more than doubled. It is not good enough for the hon. Member for Fife, East to say that if a family income falls below a certain level it will qualify for a rebate, and that many tenants are getting rebates.
The truth is that the amount of assistance by way of rebate has not kept pace with inflation. Last November the needs allowance—the method of calculating whether the family income justifies a rent rebate—was increased by only 8 per cent. at a time when the retail price index had increased by 12 per cent. In other words, the rent rebate scheme is not keeping pace with inflation.
I mentioned an average rent increase of £2·20 throughout the whole of Scotland. Some local authorities will have a higher than average increase. The Government seem to be trying to impose an increase of over £2·50 on some district councils, including Falkirk district council, which lies partly within my constituency.
The housing committee of Stirling district council had a meeting last week. Unfortunately, because my good friend the convenor was sick, the Tories had a majority on the committee and used that temporary majority to recommend an average increase of £2·24 for the tenants in Stirling district. That is still to be ratified by the full council, and I hope that the Labour group will be able to get a full turnout at the full district council meeting so that the council may have another look at the matter.
The council is in a dilemma. The Government are linking the amount of capital allocation which it will get to the level of rent. That also creates many unfairnesses. I should like to quote from a copy of a letter which a constituent, Mrs. Sandra Rooney, secretary of Bannockburn tenants association, sent to the Secretary of State for Scotland. It refers to the Orlit housing in Bannockburn:
These houses were built after the last war as temporary accommodation, and are now in such a state of disrepair that they are virtually unfit for human habitation …have recently been informed that if the current rent rise does not go through in full the Government will cut the district's budget, and therefore a major renovation within the district will be shelved.
The tenants association is afraid that the Orlit renovation scheme will be axed. The council is in a dilemma: either it freezes the rents and gets no capital allocation, which will mean the abandonment of the


modernisation schemes, or it goes ahead with the modernisation schemes, gets the capital allocation from the Government to assist but has to put the rents up by an amount far in excess of the rate of inflation and of the average wage increase which the people have had over the past year.
The Secretary of State is not here, but I hope that the Under-Secretary will remind him of the invitation in the letter to a public meeting to be held on 22 February in Bannockburn miners welfare hall. A representative of the Department has been invited. I would go one better: why should the Secretary of State himself not go to the meeting? He might be worried about getting out alive, but I will guarantee him a safe passage. I will see that he gets home all right afterwards to his own house at Gargunnock, which is not all that far away. I hope that he will be able to attend the meeting. I wonder sometimes whether some Tory MPs ever meet council house tenants face to face. It would be good for the Secretary of State or his junior Minister to attend the meeting and explain the disastrous effects of Government policy if this order is passed.
It is unfair to tie the amount of capital allocation to the level of rent increases. Earlier this evening we were discussing the powers of central Government virtually to dictate rate levels. Now we are discussing the powers of central Government virtually to dictate local government rent levels. Whatever the rights and wrongs of all this may be, it is a direct threat to local decision making and local democracy.
Just as it is unfair to tie the amount of capital allocation to the level of rent increases, it is also unfair to tie it to the number of council house sales within an authority's district. The provision of council housing in Scotland began in 1919. For the first time we are seeing a reduction in the number of council houses. Until now, under Governments of various complexions—Tory, Labour or whatever—before and after the war there have been increases in the numbers of counil houses. Now this most reactionary of all Tory Governments are turning the clock back by reducing the number of council houses.They have a twofold plan to do it.
First, the Government are forcing the local authorities to sell off their houses, irrespective of local needs and demand. In the year to September 1981 4,937 were sold. In the first half of 1981 only 1,123 council housing starts were made. Apart from forcing the local authorities to sell off their housing, the Government are causing more difficulties by the reduction of housing subsidy and of capital allocation, as a result of which the councils are not receiving enough money to replace the houses that are being sold off or to modernise those which they have managed to retain.
It is a sad day when we see the Government attempting to turn the clock back. They cannot argue that there has been a radical change in circumstances. There is still a need for more council houses in Scotland. My right hon. Friend the Member for Glasgow, Craigton (Mr. Millan) said that the construction of council housing in Scotland had played a notable part in the solution of many families' housing problems.
It is no use saying that the time has come for a change, because there are still many people, including many young married couples, waiting for a house. Their only chance is a council house, yet the Government seem to be telling

them "Sorry; there is no chance. You will have to wait years." They will drive them and many other people into the hands of the money lenders.
I shall not tolerate any Government being allowed to treat council house tenants like second-class citizens. They are first-class citizens, just like anyone else. This vicious, nasty order should be rejected, because it is an attack on the living standards of council house tenants and an attempt to turn them into second-class citizens.

Mr. William McKelvey: When I listened to the Secretary of State introducing the order, almost with a perverted admiration, I was astonished by his unmitigated gall in trying to establish that he was doing the housing authorities in Scotland a good turn. He produced figures to show that there was an increase in the grant in real terms.

Mr. David Lambie: The right hon. Gentleman was twisting the figures.

Mr. McKelvey: I do not know about the twisting and turning of figures, but they can be made to do anything. While my ears hear that the figures are increasing in real terms, when I return to my constituency my eyes tell me a different story. I see that in constituencies throughout Scotland housing is deteriorating rapidly, because local authorities are being squeezed to death by cash restrictions and the Government's squeezing their grants.
We have all received a brief from Shelter, which claims that
about £134·5 million in Housing Support Grant to local authorities for 1982/83 … compares with £140·7 million in the original order for 1981/82, which, revalued using a 12% inflation factor,
—slightly less than the correct factor—
amounts to £157.6 million at 1982/83 prices. Thus, in real terms, the cut is about … 15%".
Oddly enough, the Secretary of State's figures showed that it was an increase in real terms of 15 per cent. It makes one wonder how the calculations can be made in the Scottish Office to provide the Minister with that kind of brief.
The latest cut is only one in a series that the Government will tell us was started by the Labour Government. As we keep telling them, that is a very lame excuse. At that time I served as a councillor on the Dundee district council and I was proud to be one of those young lions who went to the barricades on the question of rents. Not only did we oppose the then Secretary of State for Scotland and his application to reduce grants, but we led a rent strike against the very council on which we served. Unfortunately it did not succeed but that is not surprising when we consider the pressures that were applied to the ordinary council tenants. But it was a magnificent gesture at that time and I urge any council tenants throughout the length and breadth of Scotland who are contemplating or perpetrating rent strikes against the rent increases that are being imposed upon them by the Secretary of State for Scotland first of all to recognise the source of their misery and thus apply the strike in a proper fashion.

Mr. Lambie: My hon. Friend, being a new Member of this House, will not know the record of the Secretary of State for Scotland when he was not on the Government Benches but on these Benches in Opposition. The Secretary of State for Scotland and I took part in rate


strikes when the people in Ayr, Prestwick and Troon were fighting against the valuations. The right hon. Gentleman and myself gave them full support. It is strange what a person will do when he is in opposition and how he will change his mind when he is in office. But the Secretary of State has given a good lead in this.

Mr. McKelvey: We learn all the time in this House and I am certainly astonished by that. None the less, that only underlines the Secretary of State's unmitigated gall in going to the Dispatch Box to ask for this order to be processed through this House.
There is more than a suspicion on the part of all local authorities that the Government are determined to phase out completely the housing support grant. For the first time since 1919, since we said that we were going to build homes for heroes to live in, six councils do not qualify at all for the housing support grant. And the Secretary of State boasts of that situation because he says here that we have six councils that are apparently managing their affairs so well that they do not need the housing support grant.
As other hon. Members have said, local and public housing obviously plays a very large part in the redistribution of wealth. We cannot ignore the situation that exists at present, when rents are being forced up by the Secretary of State, increases are being forced upon councils which were democratically elected, sometimes on a manifesto saying that there would be no rent increases. Those councils have to accept the bludgeon from the Secretary of State or, if they refuse to put their rents up, they are met with a cutlass and have their grants taken away from them. It is not just a question of an iron fist, but of the right hon. Gentleman having a bludgeon in one hand and a cutlass in the other. He is giving those authorities the sort of freedom of choice that pirates used to give lads who walked the plank when they said "You need not jump off the end; you can stay where you are and we will cut you in half'. That is the magnificent freedom that is being offered to councils throughout Scotland.
Those councils have made representation to us. Representations have been made today in this House, and they were very illuminating. We asked those authorities why in the name of heaven they did not make their protests known publicly long before these orders were laid before the House, so that we might be able to apply some pressure on the Secretary of State for Scotland in the same way as pressure is applied by English Members on the Secretary of State for the Environment, who on two occasions had had to change his mind on his applications regarding cuts upon local authorities in England.
Either Tory-controlled local authorities are not making their views known to Conservative Members or, even worse, hon. Gentlemen know of these protestations from those local authorities but ignore them or have not got the guts to stand up and fight for rudimentary justice.
The injustices of the withdrawal of central Government subsidy are manifest when compared with the subsidy paid to people with mortgages. Conservative Members need not shake their heads, because the figures defy explanation. One cannot deny that those who enjoy tax relief on mortgages are in a far better position, because over the years their subsidy has increased while that for council house tenants has rapidly decreased. As a matter of fact,

in the last two years rents in Scotland have doubled. That cannot be denied. Indeed, figures from all sources will bear that out.
That is not exactly the situation in Kilmarnock and Loudoun. Last year, having considered the somewhat veiled threats by the Secretary of State, the council decided in its wisdom to apply a massive rent increase of 39 per cent. That was imposed on council tenants in Kilmarnock shortly after the massive redundancies announced by Massey Ferguson and at Glenfield Kennedy. In its wisdom, the council decided to act in a responsible fashion. It did so and put the rents up by 39 per cent. Now, the Secretary of State has said that rents will have to be increased by a further £2.40 if the council is to get the maximum capital grant.
On this occasion, the Kilmarnock and Loudoun district council has said "Enough is enough. We are not prepared to overburden the people of Kilmarnock who are already suffering from an unemployment rate of 19·6 per cent.". That is an appalling figure by any stretch of the imagination. In view of the human misery that such unemployment brings, the Kilmarnock and Loudoun district council has bravely said that, on this occasion, it will limit rent increases to 50p. That decision will mean that no cash will be available to undertake the necessary repairs and modernisation to the large but ageing housing stock.
The Minister has said that he is a humane and compassionate man. The district council imposed a 39 per cent. rent increase last year and has decided on a 50p increase this year. The grant for which it will qualify will amount only to a drop in the bucket. The Kilmarnock people will be aware of this, because we shall tell them who the real culprits are when they start complaining that repairs are not being carried out expeditiously.

Mr. Foulkes: Is my hon. Friend aware that those views are not merely held by the elected Members and electors of Kilmarnock and Loudoun? They are also held by Cumnock and Doon Valley district council and by Kyle and Carrick district council, part of which has the unfortunate distinction of having the Secretary of State as its current representative in Parliament. I am assured that that will not last too long.

Mr. McKelvey: Obviously, my hon. Friend's source of information is even better than mine. Frankly, I thought that the Secretary of State would have resigned long ago on his past record, never mind what has happened today.
In 1979–80, average rents in Scotland were £4·92. In 1982–83, they will rise to £9·87. These figures are correct and there is no question but that rents have doubled since 1979–80 in Scotland. The increases far outstrip any index of inflation, so the figures that the Secretary of State for Scotland has offered to the district councils in respect of his formulae are a mystery. Despite the Minister's assurances that we would learn what the formulae were, we have still not received a copy of any formulae or a book of instructions on how to understand them. When we have read that, perhaps we can understand how some of the figures are arrived at.
The Secretary of State says that in arriving at these figures he has made an allowance for wages, as part of district council expenses, of 4 per cent. Kilmarnock and Loudoun district council, having heard what the Minister had to say, set its rent increase at roughly the same figure.
That is fair and humane and if there is any sense of justice the Secretary of State will look again at the Kilmarnock figures, and, perhaps as he did in the case of Moray and Nairn, make an advance on them.
Irrespective of how one looks at the problem, it is developing in an extremely serious and sinister fashion. The continuing process by which the Secretary of State for Scotland seeks to encroach and occupy the domain and the responsibility of what hitherto belonged to the district and regional authorities is never-ending. It can only end, I assume, when the next piece of legislation—the Local Government and Planning (Scotland) Bill—passes through the House and becomes law.
When that happens, the Secretary of State will have succeeded in taking over virtually complete responsibility for local government both at district and regional levels. By that time, he will be, as an individual, setting the rates as a sort of Deutscher Kommissar. He will be doing that in an undemocratic and unheard of way in terms of central Government interference with local government affairs.
When the Secretary of State does that, and when local authorities, of both Conservative and Labour hues, realise the extent of the power that he has obtained, either there will be a complete revolution by local authorities or, more likley, all those who work in local authorities, the vast majority of whom do an extremely good job under trying terms, will throw in the towel. They will no longer tolerate a situation where the Secretary of State for Scotland will set the rates but leave them to collect them. The Government will have to put the military in to do the job of the local authorities, who will completely refuse to handle the new rates. The troops will have to go in to run Scottish local affairs because of the tyrannical and despotic aims of the Secretary of State for Scotland in these matters.

Mr. R. McTaggart: I have sat through both today's debates. I have nothing but admiration for the excellent arithmetical exercise in which my right hon. and hon. Friends have indulged in highlighting the flaws in the Government's orders. The deficiencies in the proposals have been exposed. Amid the deluge of bureaucratic figures and formulae the only issue before the House has been shown to be another round of Tory cuts affecting those who are least able to defend themselves. The proposals will have a devastating effect on Scottish local authorities in general and Scottish housing in particular.
The order provides for about £134·5 million in housing support grant to local authorities in 1982–83. This compares with £140·7 million under the original order in 1981–82 which, revalued at present day prices, with a 12 per cent. inflation factor, is equal to £157·6 million. Those figures in real terms represent a cut of £23·1 million. That is, however, only the tip of the iceburg. The cut is the latest in a series of cuts. The figure of £1576 million for 1981–82 had already been cut by 33 per cent. from the 1980–81 figure which, at present day prices, would have been £233·9 million.
Six local authorities are to receive no subsidy from the central Government. This is a major break from a basic principle. Since the start of council housing in 1919, councils have been entitled to help from the central Government to meet housing costs. It is no wonder that so many hon. Members and also people outside the House accuse the Government and the Secretary of State in particular, of opening the way towards the abolition of housing support grant. Hon. Members have also learnt that council tenants of those authorities that make no rate fund contribution to the housing revenue account are soon likely to have to meet 100 per cent. of the authority's housing costs. The transfer of funds from the housing revenue account to the general rate fund means that they might even find themselves subsidising ratepayers, as already happens in various authorities in England.
We are witnessing another round of Scottish Tories pursuing their usual Thatcher dogma. Tories do not see council housing as the right of people to have a decent house for their families and themselves. Tories see council housing as a form of welfare housing for the poor, infirm and disabled. They do not see council housing as a basic right. They do not even see the right to work as a basic right.
The deluge of statistics and figures heard in this debate cannot begin to tell of the hardship that lies behind them. Bad housing causes frustration and anger. I have seen dampness in the homes of families on low wages in my constituency where people continually have to throw out old clothes that have been ruined. Many constituents come to my surgery to complain about bad housing. Although we, as Members of Parliament, can pursue these problems, we have often to advise our electors that those best equipped to deal with the complaint are the local district councils. By referring an increasing number of cases to local councillors we are making their jobs so much harder. The Government have already pushed through legislation on the sale of council houses. They have forced it on authorities such as Glasgow, which in 1980 was a "hung" council because no party had a clear majority. The Glasgow Labour Party in its manifesto pledged to resist the sale of council houses, and the result of the election was that the Labour Party was returned with a magnificant majority. Today we are seeing the Government pushing forward further legislation which will take away more power from local authorities.

It being Ten o'clock, the debate stood adjourned.

BUSINESS OF THE HOUSE

Ordered,

That, at this day's sitting, the Harbours (Scotland) Bill [Lords] may be proceeded with, though opposed, until any hour.—[Mr. Budgen.]

Housing Support Grant (Scotland)

Question again proposed.

Mr. McTaggart: The legislation will give the Government more fiscal powers at the expense of the democratically elected local authorities.
It is criminal for Ministers to come to the House and, during a sale of council houses debate, to speak about being democratically elected, because it was never in their manifesto that they would force through the sale of council

houses. Their manifestos at local authority level have been routed throughout Britain. Today, coupled with the everyday problems of housing, we are recovering from one of the most severe winters that Britain has ever seen. Instead of cutting more and more from housing authorities, the Government should ensure that more funds are available so that local authorities can help local people.

Mr. Dewar: This has been an interesting debate in which we have covered much ground.
I hope that we shall have some further comments from the Under-Secretary of State about the question of storm damage which was raised by my right hon. Friend the Member for Glasgow, Craigton (Mr. Millan). It is a question of overwhelming urgency. We are discussing a disaster of a considerable scale and, if we use Glasgow as the prime example, it is by no means the only local authority with a large headache. Most of the larger authorities do not carry insurance, not for something that is reasonably foreseeable, as the hon. Member for Fife, East (Mr. Henderson) seemed to suggest, but against quite unprecedented damage from some of the most severe weather that we have seen this century.
Indeed—I almost blush to quote him again—the hon. Member for Perth and East Perthshire (Mr. Walker) said that his local authority had a bill of £200,000 and that it too was not insured. That authority has a limited stock of council housing with only 17,000 houses. The problem occurs across the range of local authorities. In Glasgow we are looking at bills that run from £20 million to £25 million. It is difficult to be precise, but that was the best estimate that Glasgow district council could give to me today. This is not a dull accountancy exercise or a matter of moving balances and figures in an account book. We are talking about a human tragedy. Hundreds of families in Glasgow have had to be decanted and displaced from their homes and in my constituency—it would be true of almost all the constituencies of my hon. Friends—hundreds of tenants still have either no water supply or a defective supply.
When one is faced with such a catastrophe it is not right for Governments to stand upon legal niceties. It is not the time—I say this in no spirit of criticism because I realise that the Under-Secretary of State may be in difficulties with the Treasury—to pore over circulars of 1976 and 1978 and to consider the law of contract. It is not a matter for the honed professionalism of the faculty of advocates. The Government must consider their responsibility to people and act in accordance with that responsibility.
I would not go so far as to say that I do not care about the circulars. They are a relevant factor, but I care much more about the people, their suffering and the conditions in which they are being asked to live. If the Minister continues to take his present negative and rather stony-hearted approach to the problem, Glasgow will be in a desperate position.
It looks as if the total capital spending for Glasgow in the coming financial year will be about £50 million. I understand that just over £30 million of that total is legally committed. Even if the council cancelled every new building project and postponed every new modernisation project on its books, it would still not be able to meet the cost of the storm damage out of the capital expenditure that it is likely to be allocated. That situation cannot be allowed to continue. It would be a disaster if it continued. I hope that the Minister will be able to hold out some hope of an improved and more flexible situation.
My right hon. Friend the Member for Craigton was absolutely correct when he said that the precedent of the storm damage in 1968 was extremely valuable and that it should be looked at seriously by Ministers. I do not want

to labour and repeat what has been said, but I shall briefly remind the House that at that time in the city of Glasgow, as it then was, £6.4 million was spent on repairs to private sector property. The point was properly urged on the House that the local authority might have taken a restrictive view and said that it was none of its business. However, the local authority moved in to help the tenants as much as the landlords and spent a substantial sum of money.
At the end of the day the total spent was £8·8 million. Only £2·8 million was recovered from landlords. Of the remainder, £5·4 million was met by the Government. If one excludes the sum that was recovered from private landlords, just over 90 per cent. of the total cost came from the Government. I do not know whether it would be possible for this Administration to be as generous on this occasion. However, this is something that the Government should aim for, not in terms of helping Glasgow or of riding rough shod over their business ethics that say that people who are not insured should pay the consequences. However, they should help the tenants whose life style is at risk and help to save property that has been extremely badly damaged by an act of God that was not reasonably foreseeable.
I say those things because that is an immediate catastrophe that must be dealt with. In the order we are looking at the continuing crisis of housing finance in Scotland. The Opposition have a number of fundamental objections to the present order.
First there is the vexed, but important, and, I apologise, technical question of the way in which individual authorities' rate fund contributions have been arrived at. When I first looked at this year's settlement in the order, I understood that there was common ground among the Government, the Opposition and almost all the local authorities that the old method of fixing the rate fund contribution was unsatisfactory.
It was a straight per capita amount—so much per head of the population within the housing authority area was taken to be the notional rate fund contribution in calculating the housing support grant and, ultimately, the level of rents. That led to a large number of distortions that. we discussed during last year's rate support grant debate. I understood that it had been abandoned and that we would take a standard reduction of 35 per cent. in last year's rate support grant.
The Minister will remember that in the Committee on the Local Government and Planning Bill we had a considerable debate about that matter. The Minister explained that, although in a minute of a meeting on 21 December 1981 the phrase "standard deduction" was used, the new method would involve
a standard percentage reduction from the Authority's budgeted rate fund contribution for the current financial year.
At the time the Minister told me that that was a misunderstanding and a mistake in the minute. He said that there was an ambiguity and contradiction in the minute and said that such a statement had never been intended. That was why the minute had to be re-written in suspicious circumstances, which gave a misleading impression to Glasgow and other authorities in Scotland. I accepted that at face value because the Under-Secretary told me that that was so. I thought that it was striking at his credibility in terms of his competence, but no more.
I am sorry to note that on 17 December—I am obliged to CoSLA for its information which I received today—Mr.


Ian Penman of the Scottish Development Department, presumably with the Minister's authority, wrote to CoSLA. Paraphrasing at this point, he said that the old per capita system was to be abandoned. He continued:
The limit for each authority will be set on the basis of a standard percentage reduction from the Authority's budgeted rate fund contribution for the current financial year.
Again, as plain as a pikestaff, that letter of 17 December appears to contain a statement saying that it would be a standard percentage reduction. That makes it even more puzzling as to why it should have been repeated in the minute of 21 December. I am left with a question mark in my mind whether the Minister was entirely frank when he said that the standard rate percentage reduction was never intended and was all a misunderstanding.
What adds insult to injury and complicates the position even further is, even if we accept that the standard percentage reduction was never intended and that there was to be some measure of flexibility whereby the reduction could be varied from authority to authority, that no fewer than five different methods were used for calculating the individual authority's rate fund contributions. In 46 Scottish local authorities, although there were variations, last year's old per capita system was used.
In the Scottish Standing Committee of 2 February, when we debated the change in the minute of 21 December, the Minister never once departed from the position that, whatever system was being used, although it might not be a standard percentage reduction, it would be by means of a reduction in the rate fund contribution of last year.
CoSLA told me that that did not happen in those 46 authorities and that they were still back at the old per capita system. The kindest thing I can say to the Minister is that by his silence, when we specifically touched on these matters because of the confusion that arose and was so damaging to Glasgow's consideration of its rent and capital allowance positions, he at least had a duty to make it clear that we were no longer dealing with the deductions from last year's rate fund contribution but had returned to the old per capita system.
I must seriously tell the Minister that he has a reputation for reasonable competence and I would not wish to take that away from him, but that reputation is now considerably suffering from the confusion and difficulties which seem to be arising over this order, the rate support grant order, local government finance and generally between local and central government.
The Minister has done a great deal of damage. The debate in the First Scottish Standing Committee was held because the Glasgow council acted, I believe, properly on information imparted to it by telephone at a high level, between officials, and it was then spiritedly attacked by the Minister who said that he was astonished that it should take important decisions on the basis of "rumours, hints and suggestions".
The trouble is that the lack of information and the misinformation issued by CoSLA and hon. Members to the Scottish Standing Committee appears to have left us acting on the basis of rumours, hints and suggestions because we have not had a frank statement from the Government. They have not dealt with it in an honest or proper fashion.
My other main point is the way that the Government have dealt with capital allowances in this Housing Support Order. Of course, I recognise and would be the first to concede that Governments will never be able to satisfy demand on the capital side. No doubt, the £298 million which I understand is the theoretical total available in the coming year is totally inadequate compared with the need which is generally shown by local authorities.

Mr. Hugh D. Brown: In the interests of the House and out of courtesy, I wonder if Conservative Members might be quiet.

Mr. Deputy Speaker: There is a good deal of chat going on which I can hear.

Mr. Dewar: I am grateful for my hon. Friend's protection. I will not make too much of the £298 million. My point is as to the way in which specific allocations of individual local authorities have been quarried out of the global total for Scotland.
We have two strong reservations about the way in which this has been done. The first, which was mentioned by my right hon. Friend the Member for Craigton, is the fact that, built into each allocation, is an assumption about the revenue from the sale of council houses. I accept that the Minister is right, and that no doubt he has decided what each authority will get and has made an apportionment within that total between the amount that may be borrowed and the amount that will come from council house sales. I object to the fact that if the local authority does not make its council house sale target, the shortfall is money that it has lost on its capital allocation spend. It means that a tremendous built-in incentive, a blackmail or force majeure situation, is built into the system, whereby, if a local authority does not flog off its houses in a sufficiently energetic way, the people who are waiting for modernisation and rehabilitation of their dwelling houses may be disadvantaged because the housing capital allocation has been cut back in what I consider to be an artificial and dishonourable way.
The other reservation concerns the link between rent levels and the housing capital allocation. This is a matter about which we have complained before. It is a disgraceful and abhorrent innovation. The Government are trying deliberately to force up council house rents, not because the Under-Secretary believes that that is financially necessary but because, as a matter of social judgment, he thinks that rents should be higher and people should pay more for their dwelling-houses. That was made very clear in the speech of the hon. Member for Fife, East. This policy is being carried out at a time when Scotland has faced unprecedented rises in council house rents. In 1980–81, rents rose by 20 per cent. compared with the previous year. In 1981–82, they rose by 30 per cent. compared with the previous year. Now, in 1982–83, the Government come back and ask for a rise of about 25 per cent.
This is a damaging and embittering process which cannot be justified on any social ground. It is not good enough for Ministers to say that it is all right because the honest poor are being looked after by the rent rebate system. If some 60 per cent. of council house tenants cannot reasonably be expected to pay the full rent, there is something wrong with the way in which the rents are


cast. It is not a matter for self-congratulation by the Secretary of State for Scotland. It should be a matter for apology and shame.
The simple and inescapable fact is that this housing support grant order is cutting back very significantly the amount of money that is available from housing in Scotland. Shelter, as we have already been told, reckons that it is a cut this year of 15 per cent., piled on top of a cut of 33 per cent. in the last financial year. A number of local authorities have dropped out of support altogether. None of us, in discussing the miscellaneous provisions legislation, and when this machinery was being debated, could have thought—to be fair to the Minister, I am sure that he did not think—that an authority with such obvious housing problems as Renfrew would become one of the victims. We do not know where the process will stop. I assure the Minister that we shall watch the process carefully. Moreover, we shall attempt to persuade the Committee debating the Local Government and Planning (Scotland) Bill to introduce amendments to help to ward off some of the evils which will result from this innovation.
The hon. Member for Moray and Nairn (Mr. Pollock), in a typically loyal speech, alleged that the Secretary of State has shown a capacity for making a flexible and humane response to the problem of his local authority. If a flexible and humane response was shown, the hon. Member was right to draw it to the attention of the House. It is worthy of note, because it is a very rare and exceptional event. My own feeling, which I think will be echoed by every council house tenant in Scotland, is that all they have seen is higher rents and deteriorating services. That is the dreary formula that the Conservative Government have meant for thousands of people who live in public sector housing in Scotland.
The order will be condemned by local government, because it has lost confidence in the Minister in charge of it. It will also be condemned by the construction industry, which sees that many more skilled jobs will be tragically lost as a result of the cuts. In addition, the order will certainly be condemned by tenants, who rightly see that modernisation will be postponed, repairs delayed and that their houses will deteriorate because of the Government's indifference to the needs of the community. This is a sad and sorry business.
When the Secretary of State introduced this major order, he spoke for only about 10 minutes. He made no attempt to defend the order; and perhaps we should not regret that. Perhaps it does not matter. The feeling among the Opposition—which is no doubt echoed throughout Scotland—is that there can be no defence of the Government's miserable and inadequate housing policies.

The Under-Secretary of State for Scotland (Mr. Malcolm Rifkind): The emotion that the Opposition always display on housing debates is such that we have even witnessed the new experience of the hon. Member for Kilmarnock (Mr. McKelvey) predicting revolution and an Army take-over of local authorities. Such were his comments, that the hon. Member for Central Ayrshire (Mr. Lambie) began to look like an elder statesman.
The hon. Member for Glasgow, Garscadden (Mr. Dewar) said that local authorities stood to lose their capital allocations because of their inadequate receipts from the sale of council houses. However, if the hon. Gentleman

cares to listen to the answer to his point, he will realise that there were discussions with every local authority about the likely receipts. In all but two cases—Aberdeen and Midlothian—agreement was reached about the likely receipts. Therefore, if those receipts are not obtained, the local authority must have deliberately delayed its sales procedures. If local authorities do not delay, they will have nothing to fear because the figures were agreed with them.
The right hon. Member for Glasgow, Craigton (Mr. Millan) said that there had been a significant drop in building in Scotland. However, he forgot to mention that that began under a Labour Government and as a result of his Green Paper. He suggested that under the Labour Government local authorities were not refused anything that they wanted in terms of capital expenditure. In the last year of the Labour Government, capital allocations on the housing revenue account block were £277 million compared with bids of £439 million from local authorities. Yet again we discover that when the right hon. Gentleman is in Opposition he conveniently forgets that he was not a provider of bountiful largesse.
Both the right hon. Gentleman and the hon. Member for Garscadden raised the question of expenditure on housing as a result of the recent severe weather. However, neither the hon. Gentleman nor his right hon. Friend answered the Secretary of State's point. They seem to suggest that those local authorities that did not take out insurance, although they knew that if they did not they would not be reimbursed, should nevertheless be reimbursed. My right hon. Friend asked the right hon. Member for Craigton whether the Government should tell those local authorities that took out insurance and accepted the right hon. Gentleman's advice and that of the Labour Government that they will have their premiums returned, and that they should be treated in exactly the same way as those local authorities that rejected the Labour Government's advice.
The Labour Government not only advised local authorities to take out insurance but specifically warned them that if they did not do so they would not receive any reimbursement for losses arising. The Labour Government issued that advice not only in 1976 but again in 1978. The right hon. Gentleman is aware that that advice was explicit. The Scottish Office will meet officials from Glasgow district council on Friday morning. For the first time, we shall then receive information from Glasgow about its expenditure. We shall want to see whether insurance could have been taken out and, if so, why it was not. Until we have that information, I cannot go any further.
The right hon. Member for Craigton said that only council houses in good areas were being sold. The hon. Member for Fife, Central (Mr. Hamilton) said that it was impossible to sell flats at the top of multi-storey blocks. He should look at what used to be called "Terror Tower" at Dilton in Edinburgh, a multi-storey council block, every single flat of which has been sold and is lived in by owner-occupiers. If he thinks that that is an exception to the rule, he should look at the policy of Glasgow district council in Easterhouse, an area with one of the worst problems of urban deprivation in Britain. Houses in Glenell Quadrant, which even tenants would not take, have been sold to owner-occupiers. Each one of them is now occupied and fully utilised.

Mr. Millan: The hon. Gentleman knows—he is again misleading the House—that in all our constituencies it is preponderantly the best houses in the best areas that are being sold.

Mr. Rifkind: The right hon. Gentleman does not seem to appreciate that the people who have bought the houses in Easterhouse or in Martello Court have bought at the full market value. The tenants of similar houses could buy them at a major discount. Therefore, if people are prepared to buy them without any discount being offered, it is not unreasonable to assume that if the tenants were aware of the opportunity available to them they, too, would seek to purchase.

Mr. Millan: I am not interested in what they can or cannot do. I am telling the hon. Gentleman what is happening in practice, and he cannot deny that.

Mr. Rifkind: My hon. Friend the Member for Fife, East (Mr. Henderson) pointed to the example of a Labour-controlled authority in Kirkcaldy which had advised him that there was no pattern in the sales of houses, and that houses were being sold all over—

Mr. Hugh D. Brown: The hon. Gentleman has referred quite rightly to Easterhouse, which is in my constituency. He is misleading the House, because the houses that have been offered for sale are offered in special circumstances called "homesteading". Would he care to tell me how many of the other 10,000 houses have been inquired after?

Mr. Rifkind: So successful was the district council—[Interruption.] I am praising Glasgow district council. I should have thought that hon. Members would like to hear it. So successful was its first scheme in Glenell Quadrant in Easterhouse that the local authority has now launched an additional scheme which it believes will be as successful.
I firmly believe—and the experience of Kirkcaldy proves it—that when tenants are aware of the benefits from the ownership of their homes, irrespective of the area concerned, they realise it is in their interests to purchase. I am delighted that it is happening in Kirkcaldy, and I am aware that it is happeneing in other areas of Scotland.

Mr. Hugh D. Brown: Surely the Minister can do better than that. I asked him specifically how many of th 10,000 council houses in Easterhouse are being sought after for sale, as distinct from some unique arrangement.

Mr. Rifkind: I have no doubt that there are only very few at the moment. [Interruption.] I have not suggested otherwise. [HON. MEMBERS: "Oh".] What I said was that if the houses in question in Easterhouse—some of the least attractive houses in the hon. Gentleman's constituency—are sufficiently attractive to homesteaders to purchase without the benefit of a discount, it must be equally to the benefit of tenants in those areas and elsewhere, who would have the benefit of up to 50 per cent. discount, to take the same action. That is what is happening in Kirkcaldy and other areas as well.
My hon. Friend the Member for Moray and Nairn (Mr. Pollock) thanked the Scottish Office for the response it has made to the problems not just of Moray and Nairn but of a significant number of other authorities which have benefited as a result of certain calculations on the "other incomes" category of expenditure which were revised.
The hon. Member for Renfrewshire, West (Mr. Buchan) asked about the particular problem of Renfrew district council and the fact that it no longer receives housing support grant. The hon. Member must appreciate that the reason is straightforward. The payment of housing support grant to any authority is based on its income and expenditure and whether the one exceeds the other. As Renfrew district council has the fourth lowest loan charges of any local authority in Scotland, the interest that it has to pay on its previous capital projects is so low compared to the Scottish average that that has taken it out of entitlement to housing support grant. The hon. Gentleman himself said that that was a factor. Exactly the same formula has applied to every local authority, and in the case of Renfrew and several other authorities that is what has led to that outcome. The hon. Gentleman should be pleased that the loan charges of his local authority are so low. It is an objective which most local authorities would be happy to aspire to.

Mr. Buchan: The hon. Gentleman has totally misunderstood the situation. I made the point clear. We know the reasons for it. I gave him the figures for it. What I said was that he should stop looking at that sum and look at the needs of the situation. The charges are low because we have an old stock of housing and therefore a tremendously high current expenditure. In other words, he has failed to analyse the figures and give us a just settlement.

Mr. Rifkind: In terms of the needs of Renfrew district council, that is reflected in its capital allocation, which I am happy to tell the hon. Gentleman is a 32 per cent. increase on its allocation last year. The hon. Gentleman should be content with that, although I know that there is not the slightest chance that he will be.

Mr. Dewar: Could the hon. Gentleman confirm briefly what I understand from CoSLA—that the rate contributions for 46 local authorities were not done by some form of deduction from last year's RFC but on a per capita basis as in previous years?

Mr. Rifkind: I have already said to the hon. Gentleman in Standing Committee that if we had applied a standard reduction on the rate fund contribution to all local authorities the effect would have been that local authorities which last year met the Government's target would nevertheless be expected to make a. further reduction, which would have been grossly unfair and resented by them.
My hon. Friend the Member for Fife, East raised the question of the average earnings. His comments were received with a great deal of suspicion by Opposition Members. My hon. Friend's sources are correct because they are the statistics of the Department of Employment. They are the same statistics as those which have been offered by successive Governments over the last few years.
We know that the average gross earnings of full-time manual male workers aged 21 and over employed in Scotland in 1981 were £133 per week; in 1982 the estimate is £143. When one compares that with the average weekly rent in Scotland, which is £7·67, that puts the matter properly' in perspective. It is not open to Opposition Members simply to pooh-pooh these figures and say that they do not believe them. They have been calculated on


exactly the criteria which successive Governments have applied. They are the gross earnings not of all employees but of full-time manual workers in Scotland aged 21 and over. [Interruption.] Those who are unemployed do not pay the full rent; many of them do not pay any rent at all. Therefore, it is inappropriate to include them.
The House is well aware that 50 per cent. of tenants either do not pay any rent or do not pay the full rent through receiving a rent rebate. We know also that at least—

Mr. Foulkes: Will the hon. Gentleman give way?

Mr. Rifkind: No, I am sorry.
We know also that at least 25 per cent. of council tenants in Scotland have a household income of £9,000 or more per year. In view of figures of that kind, to suggest that the average rent in Scotland of £7·70 per week is excessive or not capable of increase is a gross and cruel misrepresentation which will not carry conviction either in this House or amongst the people of Scotland—

Mr. Foulkes: On a point of order, Mr. Deputy Speaker. Is it in order for the Minister to conclude his speech without apologising to the House for misleading the Committee?

Mr. Deputy Speaker (Mr. Bernard Weatherill): The hon. Member well knows that the Minister takes responsibility for his speech.

Mr. Rifkind: I conclude by reminding the hon. Gentleman and his hon. Friends that this Government were the first to give security of tenure to council tenants, to provide a tenants' charter for council tenants and to do more than any previous Administration to give rights to council tenants in Scotland.
The Labour Party talked about councils' rights and the rights of council tenants. This Government have provided them. We stand with pride in our record and in the order

Question put and agreed to

Resolved,

That the draft Housing Support Grant (Scotland) Variations Order 1982, which was laid before this House on 22nd January, be approved.

Motion made, and Question put,

That the draft Housing Support Grant (Scotland) Order 1982, which was laid before this House on 22nd January, be approved:—

The House divided: Ayes 295, Noes 216.

Division No. 65]
[10.36 pm


AYES


Adley, Robert
Blaker, Peter


Aitken, Jonathan
Body, Richard


Alexander, Richard
Bonsor, Sir Nicholas


Alison, Rt Hon Michael
Boscawen, Hon Robert


Ancram, Michael
Bottomley, Peter (W'wich W)


Arnold, Tom
Bowden, Andrew


Aspinwall, Jack
Boyson, Dr Rhodes


Atkins, Rt Hon H.(S'thorne)
Braine, Sir Bernard


Aikins, Robert(PrestonN)
Bright, Graham


Atkinson, David (B'm'th,E)
Brinton, Tim


Baker, Nicholas (N Dorset)
Brittan, Rt. Hon. Leon


Beaumont-Dark, Anthony
Brown, Michael (Brigg&amp;Sc'n)


Bell, Sir Ronald
Browne, John(Winchester)


Bendall, Vivian
Bruce-Gardyne, John


Bennett, SirFrederic (T'bay)
Bryan, Sir Paul


Benyon, Thomas (A'don)
Buck, Antony


Benyon, W, (Buckingham)
Budgen, Nick


Best, Keith
Bulmer, Esmond


Bevan, DavidGilroy
Burden, SirFrederick


Biffen, Rt Hon John
Butcher, John


Biggs-Davison, Sir John
Cadbury, Jocelyn


Blackburn, John
Carlisle, John (Luton West)





Carlisle, Kenneth (Lincoln)
Holland, Philip (Canton)


Carlisle, Rt Hon M. (R'c'n)
Hooson, Tom


Chalker, Mrs, Lynda
Hordern, Peter


Channon, Rt, Hon, Paul
Howell, Rt Hon D, (G'ldf'd)


Chapman, Sydney
Howell, Ralph (N Norfolk)


Clark, Hon A, (Plym'th,S'n)
Hunt, David (Wirral)


Clark, Sir W, (Croydon S)
Hunt,John(Ravensbourne)


Clarke, Kenneth(Rushcliffe)
Hurd, Hon Douglas


Clegg, Sir Walter
Jenkin, Rt Hon Patrick


Cockeram, Eric
Jessel, Toby


Colvin, Michael
Johnson Smith, Geoffrey


Cope, John
Jopling, Rt Hon Michael


Corrie, John
Joseph, Rt Hon Sir Keith


Costain, Sir Albert
Kellett-Bowman, Mrs Elaine


Cranborne, Viscount
Kershaw, Sir Anthony


Critchley, Julian
King, Rt Hon Tom


Dean, Paul (North Somerset)
Kitson, Sir Timothy


Dickens, Geoffrey
Knight, MrsJill


Dorrell, Stephen
Knox, David


Douglas-Hamilton, LordJ, 
Lamont, Norman


Dover, Denshore
Lang, Ian


du Cann, Rt Hon Edward
Langford-Holt, Sir John


Dunn, Robert(Dartford)
Latham, Michael


Durant, Tony
Lawrence, Ivan


Dykes, Hugh
Lee, John


Eden, Rt Hon Sir John
LeMarchant, Spencer


Edwards, Rt Hon N, (P'broke)
Lennox-Boyd, Hon Mark


Eggar, Tim
Lester, Jim (Beeston)


Emery, Sir Peter
Lewis, Kenneth (Rutland)


Eyre, Reginald
Lloyd, Ian (Havant&amp;W'loo)


Fairgrieve, Sir Russell
Lloyd, Peter (Fareham)


Faith, Mrs Sheila
Loveridge, John


Farr, John
Luce, Richard


Fell, Sir Anthony
Lyell, Nicholas


Fenner, Mrs Peggy
McCrindle, Robert


Finsberg, Geoffrey
Macfarlane, Neil


Fisher, SirNigel
MacKay, John (Argyll)


Fletcher, A.(Ed'nb'gh N)
Macmillan, Rt Hon M.


Fletcher-Cooke, SirCharles
McNair-Wilson,M.(N'bury)


Fookes, Miss Janet
McNair-Wilson, P.(NewF'st)


Forman, Nigel
McQuarrie, Albert


Fowler, Rt Hon Norman
Madel, David


Fox, Marcus
Major, John


Fraser, Peter (South Angus)
Marland, Paul


Fry, Peter
Marlow, Antony


Gardiner, George(Reigate)
Marshall, Micheal(Arundel)


Gardner, Edward (SFylde)
Marten, Rt Hon Neil


Garel-Jones, Tristan
Mates, Michael


Gilmour, Rt Hon Sir Ian
Maude, Rt Hon Sir Angus


Glyn, Dr Alan
Mawby, Ray


Goodhart, SirPhilip
Maxwell-Hyslop,Robin


Goodhew, SirVictor
Mayhew, Patrick


Goodlad, Alastair
Mellor, David


Gorst, John
Meyer, Sir Anthony


Grant, Anthony (Harrow C)
Miller, Hal(B'grove)


Gray, Hamish
Mills, Iain(Meriden)


Greenway, Harry
Mills, Peter (West Devon)


Grieve, Percy
Moate, Roger


Griffiths, E, (B'ySt, Edm'ds)
Monro, SirHector


Griffiths, PeterPortsm'thN)
Moore, John


Grist, Ian
Morgan, Geraint


Grylls, Michael
Morris, M.(N'hamptonS


Gummer, John Selwyn
Morrison, Hon C.(Devizes)


Hamilton, Hon A.
Morrison, Hon P.(Chester)


Hamilton, Michael(Salisbury)
Mudd, David


Hampson, Dr Keith
Murphy, Christopher


Hannam, John
Myles, David


Haselhurst, Alan
Neale, Gerrard


Hastings, Stephen
Needham, Richard


Havers, Rt Hon Sir Michael
Nelson, Anthony


Hawkins, Paul
Neubert, Michael


Hawksley, Warren
Newton, Tony


Hayhoe, Barney
Normanton, Tom


Heath, Rt Hon Edward
Nott, Rt Hon John


Heddle, John
Onslow, Cranley


Henderson, Barry
Oppenheim, Rt Hon Mrs S, 


Heseltine, Rt Hon Michael
Osborn, John


Hicks, Robert
Page, John (Harrow, West)


Higgins, Rt Hon Terence L, 
Page, Richard (SW Herts)


Hogg, Hon Douglas(Gr'th'm)
Parris, Matthew






Patten, Christopher(Bath)
Steen, Anthony


Patten, John(Oxford)
Stevens, Martin


Pattie, Geoffrey
Stewart, A(ERenfrewshire)


Pawsey, James
Stewart, Ian (Hitchin)


Percival, Sir Ian
Stokes, John


Pink, R, Bonner
Stradling Thomas, J, 


Pollock, Alexander
Tebbit, Rt Hon Norman


Porter, Barry
Temple-Morris, Peter


Prentice, Rt Hon Reg
Thomas, Rt Hon Peter


Price, Sir David (Eastleigh)
Thompson, Donald


Prior, Rt Hon James
Thome, Neil (IlfordSouth)


Proctor, K, Harvey
Thornton, Malcolm


Pym, Rt Hon Francis
Townend, John(Bridlington)


Raison, Timothy
Townsend, CyrilD, (B'heath)


Rathbone, Tim
Trippier, David


Rees, Peter (Dover and Deal)
Trotter, Neville


Rees-Davies, W, R, 
van Straubenzee, Sir W, 


Renton, Tim
Vaughan, DrGerard


Rhodes James, Robert
Viggers, Peter


RhysWilliams, SirBrandon
Waddington, David


Ridley, Hon Nicholas
Wakeham, John


Ridsdale, Sir Julian
Waldegrave, Hon William


Rifkind, Malcolm
Walker, Rt Hon P, (W'cester)


Rippon, Rt Hon Geoffrey
Walker, B.(Perth)


Roberts, M.(Cardiff NW)
Walker-Smith, Rt Hon Sir D.


Roberts, Wyn (Conway)
Wall, Sir Patrick


Rossi, Hugh
Walters, Dennis


Rost, Peter
Ward, John


Royle, Sir Anthony
Warren, Kenneth


Sainsbury, Hon Timothy
Watson, John


Shaw, Michael (Scarborough)
Wells, Bowen


Shelton, William (Streatham)
Wells, John(Maidstone)


Shepherd, Colin (Hereford)
Wheeler, John


Shepherd, Richard
Whitelaw, Rt Hon William


Shersby, Michael
Whitney, Raymond


Silvester, Fred
Wickenden, Keith


Sims, Roger
Wiggin, Jerry


Smith, Dudley
Wilkinson, John


Speller, Tony
Williams, D.(Montgomery)


Spence, John
Winterton, Nicholas


Spicer, Jim (WestDorset)
Wolfson, Mark


Spicer, Michael (SWorcs)
Young, SirGeorge (Acton)


Sproat, Iain
Younger, Rt Hon George


Squire, Robin



Stainton, Keith
Tellers for the Ayes:


Stanbrook, Ivor
Mr. Anthony Berry and


Stanley, John
Mr. Carol Mather, 


NOES


Abse, Leo
Cohen, Stanley


Adams, Allen
Coleman, Donald


Allaun, Frank
Concannon, Rt Hon J. D.


Alton, David
Cook, Robin F, 


Anderson, Donald
Cowans, Harry


Archer, Rt Hon Peter
Craigen,J. M. (G'gow,M'hill)


Ashley, Rt Hon Jack
Crawshaw, Richard


Ashton, Joe
Crowther, Stan


Atkinson, N. (H'gey,)
Cryer, Bob


Bagier, GordonA, T.
Cunliffe, Lawrence


Barnett, Guy (Greenwich)
Cunningham, Dr J.(W'h'n)


Barnett, Rt Hon Joel (H'wd)
Dalyell, Tam


Beith,A, J.
Davidson, Arthur


Bennett, Andrew(St'kp'tN)
Davies, Rt Hon Denzil (L'lli)


Bidwell, Sydney
Davies, Ifor (Gower)


Booth, Rt Hon Albert
Davis, Terry (B'ham, Stechf'd)


Boothroyd, Miss Betty
Deakins, Eric


Bray, Dr Jeremy
Dean, Joseph (Leeds West)


Brown, Hugh D.(Provan)
Dewar, Donald


Brown, R. C. (N'castle W)
Dixon, Donald


Browr, Ron(E'burgh,Leith)
Dobson, Frank


Buchan, Norman
Dormand, Jack


Callaghan, Rt Hon J.
Douglas, Dick


Callaghan, Jim(Midd't'n&amp;P)
Dubs, Alfred


Campbell, Ian
Dunnett, Jack


Campbell-Savours,Dale
Dunwoody, Hon Mrs G.


Canavan, Dennis
Eadie, Alex


Carmichael, Neil
Eastham, Ken


Carter-Jones, Lewis
Edwards, R. (W'hampt'n S E)


Clark, Dr David (S Shields)
Ellis, R. (NED'bysh're)


Cocks, Rt Hon M. (B'stol S)
English, Michael





Evans, Ioan (Aberdare)
Mikardo, Ian


Evans, John (Newton)
Millan, Rt Hon Bruce


Ewing, Harry
Miller, Dr M, S. (EKilbride)


Faulds, Andrew
Mitchell, Austin(Grimsby


Field,Frank
Morris, Rt Hon A. (W'shawe)


Fitch, Alan
Morris, Rt Hon C. (O'shaw)


Flannery, Martin
Morton, George


Fletcher, Ted(Darlington)
Moyle, Rt Hon Roland


Ford, Ben
Mulley, Rt Hon Frederick


Forrester, John
Newens, Stanley


Foster, Derek
Oakes, Rt Hon Gordon


Foulkes, George
O'Halloran, Michael


Fraser, J. (Lamb'th, N'w'd)
O'Neill, Martin


Freeson, Rt Hon Reginald
Owen, Rt Hon Dr David


Garrett, John (NorwichS)
Palmer, Arthur


George, Bruce
Park, George


Gilbert, Rt Hon Dr John
Parker, John


Golding, John
Parry, Robert


Graham, Ted
Pavitt, Laurie


Grant, George (Morpeth)
Penhaligon, David


Grant, John (IslingtonC)
Pitt, William Henry


Grimond, Rt Hon J. 
Powell, Raymond (Ogmore)


Hamilton, James(Bothwell)
Price, C. (Lewisham W)


Hamilton, W. W. (C'tral Fife)
Race, Reg


Hardy, Peter
Rees, Rt Hon M (Leeds S)


Harrison, Rt Hon Walter
Richardson, Jo


Hart, Rt Hon Dame Judith
Roberts, Allan(Bootle)


Hattersley, Rt Hon Roy
Roberts, Ernest (Hackney N)


Healey, Rt Hon Denis
Robertson, George


Hogg, N. (EDunb't'nshire)
Robinson, G. (Coventry NW)


HomeRobertson, John
Rooker, J. W. 


Homewood, William
Roper, John


Hooley, Frank
Ross, Ernest (Dundee West)


Howell, Rt Hon D, 
Rowlands, Ted


Howells, Geraint
Sever, John


Hoyle, Douglas
Sheerman, Barry


Huckfield, Les
Sheldon, Rt Hon R. 


Hughes, Mark(Durham)
Shore, Rt Hon Peter


Hughes, Robert (Aberdeen N)
Silkin, Rt Hon J. (Deptford)


Janner, Hon Greville
Silkin, Rt Hon S. C. (Dulwich)


Jay, Rt Hon Douglas
Silverman, Julius


John, Brynmor
Skinner, Dennis


Johnson, James (Hull West)
Soley, Clive


Johnson, Walter (Derby S)
Spearing, Nigel


Johnston, Russel(Inverness)
Spriggs, Leslie


Jones, Rt Hon Alec (Rh'dda)
Stallard, A. W. 


Jones, Barry (East Flint)
Steel, Rt Hon David


Jones, Dan (Burnley)
Stewart, Rt Hon D. (W Isles)


Kaufman, Rt Hon Gerald
Stoddart, David


Kerr, Russell
Stott, Roger


Kilroy-Silk, Robert
Strang, Gavin


Lambie, David
Taylor, Mrs Ann (Bolton W)


Lamborn, Harry
Tilley, John


Lamond, James
Tinn, James


Leadbitter, Ted
Torney, Tom


Leighton, Ronald
Urwin, Rt Hon Tom


Lewis, Arthur (N'ham NW)
Varley, Rt Hon Eric G, 


Lewis, Ron (Carlisle)
Wainwright, E. (DearneV)


Litherland, Robert
Walker, Rt Hon H, (D'caster)


Lofthouse, Geoffrey
Watkins, David


Lyon, Alexander(York)
Weetch, Ken


Lyons, Edward (Bradf'd W)
Welsh, Michael


McDonald, DrOonagh
White, Frank R, 


McElhone, Frank
White, J, (G'gow Pollok)


McGuire, Michael(Ince)
Whitehead, Phillip


McKay, Allen(Penistone)
Whitlock, William


McKelvey, William
Wi1ley, Rt Hon Frederick


MacKenzie, Rt Hon Gregor
Williams, Rt Hon A, (S'sea W)


Maclennan, Robert
Wilson, Gordon (Dundee E)


McNally, Thomas
Wilson, William (C'try SE)


McNamara, Kevin
Winnick, David


McTaggart, Robert
Woodall, Alec


McWilliam, John
Woolmer, Kenneth


Marks, Kenneth
Wright, Sheila


Marshall, D(G'gowS'ton)
Young, David (BoltonE)


Marshall, DrEdmund (Goole)



Maxton, John
Tellers for the Noes:


Maynard, MissJoan
Mr. Hugh McCartney and


Meacher, Michael
Mr. Frank Haynes.

Question accordingly agreed to.

Orders of the Day — Harbours (Scotland) Bill [Lords]

Order for Second Reading read.

The Under-Secretary of State for Scotland (Mr. Alexander Fletcher): I beg to move, That the Bill be now read a Second time.
This short Bill was introduced in another place. It has been passed for our consideration now having been welcomed there, particularly, I should record, by Lord Boothby, formerly the hon. Member for Aberdeenshire., East, who, I am happy to say, even at the ripe old age of 82, still takes an active interest in matters that affect his former constituency.
The Bill gives powers to establish harbour trusts to hold, manage and maintain harbours in Scotland and to transfer to such trusts any harbours held or maintained for the time being by the Secretary of State for Scotland as harbour authority. The immediate purpose of the Bill is to enable the Secretary of State to disengage from his role as harbour authority for Peterhead Bay harbour and to set up an independent harbour trust to take over this responsibility.
Peterhead Bay harbour is a major North Sea oil and gas servicing port. I should perhaps explain how the Secretary of State for Scotland comes to be the responsible authority for it. In the mid-19th century, it was decided that a "harbour of refuge" should be established on the north-east coast of Scotland to provide shelter during adverse stomis for the sail-driven herring fleet. The Government of the day, however, as practical Victorians, thought that a prison should be constructed beside the harbour so that the harbour works could be built by men who in today's parlance would be described as "doing their porridge". Peterhead was not the first choice for this combined harbour-prison development. Wick was better placed, but, while the people of Wick wanted a new harbour, they were not prepared to accept a prison along with it. In that respect, nothing has changed much over the years.
Peterhead was chosen and the Peterhead (Harbour of Refuge) Act 1885 gave the Admiralty power to construct massive breakwaters enclosing the Bay of Peterhead to form a harbour of refuge and for that purpose to use "male Scotch convicts" who were to be housed in a new prison at Peterhead. Work began in 1888, but the breakwaters were not completed until 1956–68 years later. Again, nothing has changed much over the years.
With the demise of sail, the herring fleet no longer needed a harbour of refuge and, therefore, little or no practical use was made of the harbour. For administrative reasons, the harbour was transferred in 1960 from the Admiralty to the Secretary of State for Scotland by an order-in-council and the harbour was kept more or less on a care and maintenance basis. That changed, however, on the discovery of oil and gas in the North Sea. The Secretary of State began to receive inquiries about the development potential of this strategically placed harbour, which contains within its two breakwaters 200 acres of sheltered water with up to 60 ft. of depth. But the Secretary of State was unable to respond to those inquiries.
He did not have adequate powers under the Harbour of Refuge Act either to develop the harbour himself or to allow other people to do so.
It was therefore necessary to promote legislation to give further powers. The Harbours Development (Scotland) Act 1972 was a public Bill covering harbours in Scotland for which the Secretary of State was harbour authority. But, like the Bill before us today, it was promoted essentially to deal with Peterhead Bay harbour. The 1972 Act was debated in the House in June of that year when the opposition co-operated with the Government of the day to put through this urgently needed legislation in less than seven weeks. There has been throughout a commendable history of co-operation between both sides of the House to develop this important North Sea oil facility. Lord Campbell of Croy, when Secretary of State, authorised commencement of development, but it was Lord Ross of Marnock, in his time as Secretary of State, who opened the £3 million service base which was built on reclaimed land at the south of the harbour. The past eight years have also seen the development of another service base on the north side of the harbour and of a tanker jetty able to receive oil tankers of up to 40,000 tonnes.
Throughout these developments the Secretary of State has had advice from the Peterhead Bay Management Company. That company was set up in 1973 to advise on development decisions affecting the harbour. Its commercial advice over the development period has been a big factor in the success of the Government's plans for the port. I wish to express our appreciation to the chairman and directors of the company for all the work that they have done during the years to help convert the unused harbour of refuge into a successful commercial port.
I do not believe that anyone thought that the company would last as long as it has. One reason for the delay is that until now it has not been possible to find parliamentary time to put through legislation to allow the Secretary of State to transfer the harbour.
Also, some time was devoted to consultations to determine whether to amalgamate the two harbour authorities at Peterhead: that is, to bring the bay harbour and the adjacent fishery harbour, now the foremost white fish port in the land, under one management. It was found, however, that there was no local enthusiasm for unification of the authorities, and the Government of the day decided that separate arrangements must be made for the Peterhead Bay itself. The right hon. Member for Rutherglen (Mr. MacKenzie) will recall announcing that when he opened the new tanker jetty in 1976.
The Scottish Office has consulted extensively on the terms of the Bill with local bodies and those with an interest in Peterhead Bay harbour to obtain views on the proposal to form a new authority. In every instance the Secretary of State's policy of disengagement from Peterhead Bay in favour of an independent trust has been accepted.
The Bill provides for the setting up by order of trusts to become harbour authorities for any port held or to become harbour authorities for any port held or managed by the Secretary of State. Commercial ports in Scotland are traditionally trust ports: the Clyde, the Forth, Montrose, Dundee and Aberdeen, for example, are all administered in this way under the general supervision of the Secretary of State for Transport. Creating a Peterhead Bay trust under the Bill would this Peterhead into

line with the other commercial ports in Scotland. An order for Peterhead would also set out the arrangements for membership of the authority and we propose that the new board should contain representatives of local authorities, from the adjacent fishery harbour, and other members appointed by the Secretary of State. We intend that the Government appointees should have commercial and harbour management expertise, including knowledge of the oil industry upon which the prosperity of the harbour depends. By this means we hope to create a well-balance executive board able to react quickly and effectively in the interests of both the locality and the harbour itself.

Mr. George Foulkes: I am not complaining about the suggestion to set up a trust and a board along the lines suggested by the Minister. However I wonder whether it was considered during the discussion that the responsibility might be taken over by the British Transport Docks Board, as it is the most successful harbour in the United Kingdom, at Ayr. Was it considered that the British Transport Docks Board might take over Peterhead?

Mr. Fletcher:: Our endeavour is to put the Peterhead harbour on the same basis as almost all the commercial harbours in Scotland—the Clyde, the Forth, Montrose, Dundee and Aberdeen. Most harbours are run on a commercial basis. The British Transport Docks Board is an exception. We wanted to apply the normal type of trust to Peterhead.
Under the Bill the Secretary of State will also be able to transfer to a trust a harbour held or maintained by him, together with all the rights he enjoys as harbour authority for the port and also any connected liabilities. In the case of Peterhead Bay, the trust will take over transferred assets at full market value and in addition will be given rights such as the power to levy vessel and cargo dues and to develop the harbour. It will also accept the liabilities to maintain and repair the harbour, to keep it properly dredged and to make arrangements for trafic manoeuvering within it. Our aim will be to create a modern trust with the full range of powers and duties normally held by the harbour authority of a commercial port.
The authority will, in addition, have some particular responsibilities, which will be of interest to my hon. Friend the Member for Aberdeenshire, East (Mr. McQuarrie). It will, for example, be obliged to ensure uninterrupted access to the fishery harbour at Peterhead. It is of the utmost importance that fishing boats using Peterhead should be able to put out to sea without hindrance so that the efficiency of that major fishing port is not hampered in any way. We will ensure also that the fishing boats will continue not to be charged for crossing the harbour.
An obligation will be placed upon the new authority in relation to the "Lido" beach. This, I should explain, is a recreational area much used by the citizens of Peterhead and lies at the western edge of the harbour. During the passage of the 1972 Act, great concern was shown in the House that the environment of this amenity area should be protected as far as possible from the harmful effects of the development in the harbour. Successive Secretaries of State in all their decisions over the years have taken great care to ensure that that should be so. The new authority will be required to continue this policy.
Finally, there are the financial implications of these proposals. The harbour is a profitable commercial


operation. Income payable to the Secretary of State in the year ending March 1981 was over 1 million, while in the same period the Government's expenses were just under £380,000. Thus, the surplus achieved in that year was £677,000. The capital side of the balance sheet is equally encouraging. Since 1973, £1 1 million capital expenditure funded by parliamentary vote has been used in the harbour. Within only eight years, the capital debt has been totally repaid.
These are good results, I am sure that hon. Members will agree that the Government will hand over to the new authority an extremely viable and healthy commercial operation well placed to continue to give vital support and thrust to our North Sea oil industry. The Government have been responsible for this harbour for 95 years. Since the passage of the 1972 Act, they have taken full advantage of every development opportunity. Development of the harbour is virtually complete. Its future in North Sea oil exploration and development is assured. It is logical, therefore, that the harbour should be managed in the same way as the other major commercial Scottish ports, and should be passed into the hands of an independent harbour trust. I commend this Bill to the House.

11 pm

Mr. Bruce Millan: This is not a controversial Bill, and we do not oppose it. Nevertheless, it is an unusual Bill, because it is expressed in general terms, as was the 1972 Act, to deal with the harbour of Peterhead Bay.
It is unfortunate that, in dealing with a specific harbour, the Bill is couched in general terms, particularly when the Secretary of State does not appear to know what other harbours he owns. I tabled a question for him to answer on Monday of this week, asking him to list the harbours that are held and maintained by him. He said that he held and maintained Peterhead harbour but that there was no list of the other harbours and that it would be too costly to produce such a list. It is rather odd that the Scottish Office does not know which harbours are under the control of the Secretary of State. The Minister, in introducing the Bill, said that there was no immediate intention of disposing of anything else. I hope that there is no intention of disposing of anything else at the moment. It would have been nice to know what the Bill covered apart from Peterhead Bay.
I want to make two points about what is happening at Peterhead Bay. The Minister described the history of the harbour. He particularly mentioned the Peterhead Bay Management Company and the directors who have run the harbour since the 1972 Act. I, too, visited the harbour and I was familiar with the directors of the company. I may not be completely up to date, but I remember that Dr. Maitland Mackie was the chairman at one time. The company has done a good job for the harbour, and I join the Minister in his tribute to the work done by all those concerned, not just Dr. Mackie. I believe that Mr. Williamson was the chairman at one time. Others have been involved, and I believe that they have all done a good job.
As they have done a good job, and as the Minister said that the harbour has made money, it is all the more extraordinary that almost all the harbour assets were sold off before the Bill came to the House. The Minister did not mention that fact. The quay for the oil service base and the associated facilities—from which, presumably, the money

was made to produce the satisfactory profits that have come to the public purse—have been sold off at some time during the past few months. It is quite extraordinary.
I am not opposed to the idea of passing this harbour to a harbour trust, but what are we passing? As far as I know, we are passing a tanker jetty and a breakwater. The breakwater itself will not generate much income, but the part of the harbour that was generating a satisfactory income—the oil service base—has been sold. The Minister did not even mention that. There was no reason to sell. Why was it sold? Why was it not held and passed to the harbour trust and the public authority? Why did the Government think it necessary to sell it? Why did they sell it for that price? It is an extraordinary business. Perhaps the Minister can explain the arithmetic.
The Government's consultative document of 1 July 1981 said that the harbour's assets were valued at £3·6 million. According to an answer which I received on Monday, the old jetty has been sold to oil interests for £2·4 million. That leaves assets of £1·2 million available. However, Lord Mansfield said that the value of the assets to be handed over to the new trust was £650,000. The figures do not square. The assets were apparently £3·6 million. They were sold at £2·4 million and only £650,000 worth of assets was left. What has happened to the rest? Is the figure of £2·4 million too small? If it is, why was that favourable figure chosen? We are talking about a favourable public asset.
The Minister said that there was revenue amounting to about £1 million, £300,000 worth of expenditure and a profit of about £600,000. It is a pretty good deal, if those are the figures, to sell the profitable bit for £2·4 million. That leaves something which is not particularly commercial. That was not dealt with either by the Minister tonight or by the other place. Why were the assets sold? What was the benefit? There might be gaps in my information, but why was such a favourable figure involved, and such an unfavourable figure for the Peterhead management?
The Bill tells us nothing about the setting up of the trust. It will be set up by order, subject to a negative resolution. If we do not like it, we can table a prayer against it. That is not satisfactory because we cannot amend the order. What do the Government intend to do about consultation?
What about the composition of the new authority? The document of 1 July suggests a basis for discussion on the composition of the new authority. It includes harbour interests, the regional council, the management and district council, the chief executive of the new authority and three members—one to be nominated by the Secretary of State. I do not disagree with that, but it is normal to have a trade union representative, for obvious and desirable reasons. May we have an assurance that one of the three Secretary of State's nominees will be a trade union representative?

Mr. Albert McQuarrie: I am very grateful to my hon. Friend the Minister for his complimentary remarks about my illustrious predecessor of a few years ago, the noble Lord Boothby of Buchan and Rattray Head. As my hon. Friend said, the noble Lord is 82 this month. He continues to take an active interest in the constituency of Aberdeenshire, East and he and I meet regularly in the Palace of Westminster and I often hear his wise counsels.
I welcome the Bill, which is in line with the Government's policy to transfer power from central Government to those within local communities. Like my hon. Friend the Minister and the right hon. Member for Glasgow, Craigton (Mr. Millan), I pay tribute to the members of the Peterhead Bay Management Company Limited and the staff for the most efficient way in which the bay harbour has been administered. It is a highly organised harbour and ranks with the finest in the United Kingdom, employing within the harbour area many highly skilled operatives. That has been of great benefit to Peterhead, in my constituency. That is due in no uncertain manner to the devotion shown by those responsible until now for the management of the bay harbour, which has encouraged firms to set up within the harbour area, thus creating much-needed employment in the indigenous industries as well as in the oil and gas industries.
As has been said, there are two harbours in Peterhead: the Peterhead Bay harbour—formerly known as the Peterhead harbour of refuge—and a series of inner harbours that are principally used by fishing vessels. To reach the fishery harbour, vessels must enter the bay harbour. It is worth recalling that the development of the bay harbour—which my right hon. Friend the Secretary of State will place under the control of the new trust—was commenced in 1886, when it was decided that a new prison should be sited to the south of Peterhead. In return for the town council's permission, the Admiralty would, by the use of convict labour, construct a harbour of refuge for the fishing fleet by building breakwaters across the opening of Peterhead bay.
Powers to do that were taken under the Peterhead Harbour of Refuge Act 1886. Until 1960, the Admiralty was the harbour authority for the bay harbour, but it was in that year that the function was transferred to the Secretary of State for Scotland. When it became apparent that the full potential of the bay harbour was not being exploited, the then Secretary of State—under the Harbours Development (Scotland) Act 1972—obtained the consent of Parliament to develop the harbour. The result is the excellent bay harbour, which is in operation and which is managed on behalf of my right hon. Friend by the Peterhead Bay (Management) Company. Its main function is to advise the Secretary of State on the commercial development of the bay harbour and—through its harbour manager—to look after the day-to-day affairs within the harbour on his behalf.
Access to and from the fishery harbours is gained by crossing the bay harbour and all traffic berthing in either harbour must pass between the two breakwaters. It has always been a primary concern of Secretaries of State for Scotland, including the right hon. Member for Craigton and my right hon. Friend, to ensure that there is as little disruption as possible to the fishing traffic entering or leaving the port of Peterhead, to the extent that any major movement of fishing vessels, either going to sea or returning to the market, has priority over all other vessels.
I am delighted to learn this evening that that practice will be continued when the new trust is brought into being. A joint liaison committee—comprising members of the Peterhead Bay (Management) Company and the Peterhead harbour trustees, who administer the inner harbours—meets from time to time to discuss matters of common interest in the operation of the harbours. One of

the functions approved by the joint committee is that the harbour master of the fishing harbour is in charge of the movement of shipping within the fishery harbour and the bay harbour. The harbour master at present holds an appointment from the Secretary of State for Scotland in respect of his duties in the bay harbour. Therefore, can my hon. Friend tell the House whether the harbour master will retain his appointment, and whether the liaison committee will remain in being; or will both of those matters be for the decision of the board of the new authority proposed under the Bill?
I turn now to the powers and functions of the new trust which are covered in clause 1(2). I understand that it is the intention of my right hon. Friend to make the trust as representative as possible of the local community—he made that point in his opening remarks—and also of the various sectors of industry which are connected with both harbours. I welcome my right hon. Friend's proposals and express the hope that he will endeavour to make the composition of the new trust as widely representative as he can and give consideration to the existing harbour interests, the regional and district councils, the community of feuars of the town of Peterhead, and the oil and gas industries which at present operate within that harbour area. Obviously, my right hon. Friend will have a most difficult task in satisfying all the requests which have been made to him by the various bodies interested.
I hope that, in considering the nominees of the new trust, appointments will be made only after the most serious and careful thought, bearing in mind that the new body will have greater responsibility than the present board. I also suggest to my right hon. Friend that, as the new trust will have delegated authority for the administration of, and the responsibility for, the bay harbour, he might like to consider a cosmetic change in the title of the new trust.
I should like to put three further points to my hon. Friend. First, the new trust which is to be set up will be in the same position in its control of the harbour as other commercial ports in Scotland which are run by trust boards. In the case of the other trust boards, the responsibility within Government lies with the Department of Transport. Will my right hon. Friend say whether the bay harbour trust will come under the Department of Transport on formation, or will it remain within the power of the Secretary of State for Scotland?
Secondly, in considering a national refuge role, the facility remains to revert the bay harbour to a NATO harbour or refuge. Is it the intention of my right hon. Friend to ensure that any leases which may be granted by the new trust will have a clause incorporated which will specifically require a resumption of the NATO facility in a national emergency? Perhaps my hon. Friend will confirm what proposals there are in this matter, which could be important if not made clear before the new trust is set up.
I should like to refer to the remarks made by the hon. Member for South Ayrshire (Mr. Foulkes) in connection with the possible consideration of the National Dock Labour Board scheme being brought in for this harbour. I am sorry that the hon. Member has now left the Chamber, because I can tell him that when the discussions were taking place at local level concerning this matter, there was no desire by the people in the bay harbour to have the dock labour scheme put into operation. The fishermen made the pertinent point that if the dock labour scheme


were brought into operation and the dock labour scheme employees arrived in Peterhead, they would throw them into the sea, the reason being that Aberdeen is now dying as a direct result of the dock labour scheme being in operation there. The fishermen of Peterhead want nothing to do with the scheme.
Finally, there is the financial implication in the setting up of the new trust. As I understand it, my right hon. Friend intends that the assets and liabilities attaching to the harbour will be taken over by the new authority. I note in this connection that my right hon. Friend proposes that, with the exception of the breakwater structure and the tanker jetty, the other assets of the harbour will be disposed of before the transfer of power to the new authority—this may answer to some degree the point made by the right hon. Member for Craigton—which will enable the present outstanding debt of the existing harbour authority to be substantially cleared, leaving the new authority with only a very small debt burden.
I am also pleased that my right hon. Friend has taken this into consideration and that he intends to give some borrowing powers to the new trust in the interim period. That is particularly important in view of that fact that in 1980–81 the provisional maintenance expenditure for the existing board was estimated at £151,200. However, from 1981 to 1984, the maintenance work will increase in cost, owing to the necessary repairs at the south breakwater, which is estimated to cost £300,000 per annum.
I support the Bill and congratulate my right hon. Friend on seeking powers to disengage the central Government from the role of the harbour authority for Peterhead bay harbour which I hope will also lead to a reduction of staff at the Scottish Office and thus, in some small way, reduce the present public expenditure commitment.

Mr. J. Grimond: I shall ask one or two questions about the Bill. I have a little experience of harbour areas in which both oil-related activities and fishing occur. Although it is said that the Bill only immediately applies to the harbour refuge near Peterhead, it is, of course, drafted in general terms and might be applied to other parts of Scotland.
First, we must be told how many harbours might come under the Bill. It is incredible that the Scottish Office do not know that answer and Parliament cannot be satisfied with that situation.

Mr. Barry Henderson: Is the right hon. Gentleman aware that in a Written Answer of this week the Scottish Office said that there was only one harbour, as such, held and maintained by the Secretary of State for Scotland and that that was Peterhead?

Mr. Grimond: If there are two harbours that might conceivably come under the Bill, I am surprised that they are not specified. The Bill is drawn in general terms. However, the Scottish Office will no doubt confirm that only one other harbour could be affected.
There is at least a danger of some conflict between the interests of the oil supply vessels and fishing boats. So far, that problem is containable round Orkney and Shetland. Fishing boats are not, of course, exclusively used for fishing, and there are other sorts of craft concerned with leisure which may be affected by the rules and byelaws applied to harbours.
As I understand it, the Government oppose the setting up of new quangos. This is a new quango and I ask whether it is necessary. If one considers the title of the Bill, it is for the establishing of harbour trusts and not for the handing over of existing harbour trusts or the disposing of harbours in other ways. As we understand it, this is an anti-quango Government and here they are setting-up a quango. We want some explanation about that.
We are told that the most successful port in Britain is Felixstowe which is run by private enterprise. Has that aspect been considered? Has the local authority been considered? I do not want to press that point on the grounds expressed by the hon. Member for Aberdeenshire, East (Mr. McQuarrie), but we should know why we are establishing a new board and why it is not going to the existing board which, presumably, controlled Peterhead fishing harbour, to the local authority, or to be disposed of in other ways. We want to know why the Bill is specifically confined to the establishing of new harbour trusts and not the handing over of harbours to existing trusts of harbour authorities. It might be handed over to the user of the harbour.
My next point concerns the finances of the harbour. I understand that it is presently extremely profitable. What happens to the profit? Is it to be included in the Bill without any financial obligations one way or the other to a new trust? Is that trust entitled to borrow—as I believe it is—and to retain any profits it makes? If so, can those profits be used only for the development of the refuge harbour or for the general advancement of Peterhead, its fisherman and other maritime interests?
We need to know a little more about why the Bill is in its present form, why it is confined to establishing a new quango and what other possible future has been considered for this harbour.

Mr. Robert Maclennan: The Under-Secretary of State, referring to the historical origins of Peterhead Bay, recalled that the original choice had been for Wick in Caithness. In the last two decades, the people of Wick have greatly regretted the decision that was taken by their forebears not to take advantage of the offer to develop the facilities but to accept the less attractive proposition that a prison should be established by convict labour. They felt that it was particularly unfortunate in view of the proximity of Wick harbour to developments in the oil industry and the Government's evident lack of interest in promoting the development of Wick harbour as a servicing base for industry.
Some people feel that, as the port of Peterhead is in the ownership of the Secretary of State, that might to some extent account for the promotional efforts that were made to attract the oil industry to Peterhead in preference to Wick and other ports on the littoral of the North Sea. The Government's failure to take adequate steps to draw the attention of possible operators in the Beatrice field and other fields in the inner Moray Firth area to the attractions of Wick harbour was also felt to be remarkable. Some have wondered whether the status of the harbour trust contributed to this situation.

Mr. McQuarrie: The hon. Gentleman has suggested that, despite the advantages of Wick, the Government of the day promoted Peterhead harbour because it was under the ownership of the Secretary of State. Perhaps he will


reflect on the fact that the first oil to come ashore in Scotland was at Cruden Bay, which is close to Peterhead. That was the reason for the accelerated expansion of Peterhead.

Mr. MacLennan: I do not deny what the hon. Gentleman said. Peterhead was the natural place to go in the initial stages of the development, but I suggest that recent developments are more contiguous to the coast of Caithness than to the hon. Gentleman's constituency. The Beatrice field is only 12 nautical miles from the port of Wick. Other exploration going on in that area makes Wick a natural place to service these developments. Indeed, there is growing commercial interest in these possibilities.
The Bill is somewhat odd and its origins are far from clear. In another place the Minister of State, Lord Mansfield, said that consultations initiated by the Scottish Office had taken place with bodies with an interest in the harbour about the proposal to form a new authority and that all had accepted the Secretary of State's reasons for wishing to disengage from the harbour in favour of an independent trust. But neither the Minister of State in another place nor the Under-Secretary of State in this place has favoured us with any of those reasons.
Apparently the harbour has been run profitably under the excellent management of the Peterhead Bay Management Company. It has been presented almost as a matter of administrative tidiness that we should have primary legislation to make the arrangements in Peterhead conform with what is going on elsewhere. That is not good enough. A satisfactory commercial operation has been run by local people for the benefit of the community and the Minister wants to turn it upside down. It is not as though the Secretary of State is withdrawing wholly from the operation. He intends to appoint the trustees. Therefore, he is not proposing to stand off from the operation.
I suspect that there is more to the Bill than meets the eye. I suspect that the right hon. Member for Glasgow, Craigton (Mr. Millan) may have put his finger on something that the Public Accounts Committee may wish to pursue further, and ask what has happened to the assets that have been generated over the past four years, to which the Minister has drawn attention. Is this new trust to be capable of being as profitable as the harbour has been prior to the sale of these assets? The Minister has so far been exceedingly cagey about that and not a word was said about this in another place in introducing the Bill.
The right hon. Member for Craigton has drawn attention to the financial discrepancies, upon which the Minister must throw some light when replying to the debate. If he does not, it is extremely likely that my colleagues in the PAC will be taking a close look at what has happened. Is this a matter of selling off yet another public asset to private concerns, with the result that there could be damaging effects upon the prospects of the harbour being run in an integrated way? We do not know and the Minister has been most unforthcoming about this. The House deserves more frankness than we have had.

Mr. Alexander Fletcher: By leave of the House, I should like to reply to the points that have been raised. I say to the hon. Member for Caithness and Sutherland (Mr. Maclennan) that there is nothing mysterious about the Bill

or the steps that the Government are taking to bring Peterhead harbour into line with other commercial harbours in Scotland and elsewhere in the United Kingdom.
The right hon. Member for Glasgow, Craigton (Mr. Millan) asked about the effect of the legislation on other harbours. He made fun of the fact that we were unable to list all of the possessions of the Secretary of State for Scotland. I doubt whether the right hon. Gentleman could have done so when he held that office. Peterhead Bay is the only harbour for which the Secretary of State is presently designated as the harbour authority. When the Harbours Development (Scotland) Act 1972 was before Parliament the Secretary of State was also the harbour authority for Uig pier. This pier has since been disposed of, as part of the estate to which it was attached, so that there is, technically, no other harbour for which the Secretary of State is responsible.
The Scottish Office has extensive agricultural estates in Scotland, many having small moorings and jetties that are too numerous to identify and that fall within the definition of a harbour for the purposes of the Bill. There is no present intention to transfer any of these to a harbour trust, but it could happen that, as the development of oil resources proceeds around the coast of Scotland, some of these harbours might find themselves in a position similar to that of Peterhead in 1972. Therefore, the 1972 Act and this legislation could later be used to transfer such a harbour from the Secretary of State to an independent trust.
The right hon. Member for Craigton also asked about the sale price, which was settled on the advice of the chief valuer and was the best price that could have been realised. There may have been some considerations taken into account by the chief valuer as to his estimate of the potential life of North Sea oil activities as they will affect the harbour.
The question of the sale of assets at Peterhead Bay harbour was also raised by the right hon. Gentleman. We are confident that the new authority will be able to function perfectly well without land holdings. There will be a minimum financial effect for the new authority as a result of a prior sale of assets because under the proposed disposal it will receive about £410,000 less in rental income than the Secretary of State receives now. If the assets were not sold and transferred as a commencing capital debt at their market value of over £2½ million, the annual repayments over 20 years would amount to about £405,000. We see the trust being perfectly able to manage in the financial sense, without the land holdings that have been disposed of. I should correct the right hon. Gentleman on one point. Not all the assets are to be sold by the Secretary of State. The tanker jetty is not to be sold now.

Mr. Millan: No.

Mr. Fletcher: I am sorry; I thought the right hon. Gentleman said that it was being sold. He will know, therefore, that it is proposed that the jetty be transferred to the new authority at asset value, which is about £650,000. It will be asked to review its attractiveness for development and sale.

Mr. Millan: What I am interested in is the apparent discrepancy in the figures. The hon. Gentleman said that the assets, apart from the jetty which is valued at


£650,000, the figure I quoted and which was given in another place, have been disposed of for the best price possible as valued by the district valuer. In the consultative document, issued only in July last year, the value of the assets as at February 1980 is given as £3·6 million. The amount received is £2·4 million and the value of the assets which are left is only £650,000. On the face of it, the bits which have been sold must have been disposed of at a value less than the value in the consultative document as at February 1980. That seems odd. If anything, one would have thought that the normal process of inflation might have put the figure up beyond £3·6 million and that therefore considerably more than £2·4 million would have been obtained from the sale. That is the point about which I was asking. I hope I have made myself clear. If the hon. Gentleman is not able to answer tonight, I should like him to write to me. If he can answer tonight for the benefit of the House, that would be useful. We want this point cleared up.

Mr. Fletcher: The major difference is the tanker jetty. I should like to look at the question more carefully and come back to the right hon. Gentleman on it.
The right hon. Gentleman also asked about the appointment of trade unionists to be members of the authority. In the draft of the harbours order we have included a statement to the effect that amongst the qualifications of those appointed will be experience in the organisation of workers.
My hon Friend the Member for Aberdeenshire, East (Mr. McQuarrie) joined in the praise for the management company and the splendid work that has been done. I know that my hon. Friend has first-hand experience of the valuable contribution that has been made by the management company to the development of the port. Responsibility for the harbour trust in future will lie with the Secretary of State for Transport, which is the normal procedure in these matters. I can confirm that the new authority will be in funds at the commencement of its operations. Arrangements have been made for that. I cannot answer my hon. Friend's point about NATO, but I shall write to him about it.
My hon. Friend also asked about the harbour master and the staff. It is expected that the staff, who number three, including the harbour master, will transfer to the new authority. We expect that the existing agreements with the fishery harbour trust will continue, remembering that the fishery harbour will be represented on the new trust. Agreements, which include the unified traffic control systems, the navigational arrangement for both ports, the joint weather warning systems and the single pilotage district which the trustees of the fishery harbour operate will be maintained under the new arrangements.

Mr. McQuarrie: Is my hon. Friend saying that the fisheries harbour master will be in control of both the fishery harbour and the bay harbour? Will that appointment be made by the Secretary of State for Scotland, or will it be made by the new tust when it is set up?

Mr. Fletcher: The appointment will be made by the new trust. Initially the harbour master who is in command will be transferred to the new trust, but thereafter any changes in that appointment will be a matter for the new authority.

Mr. McQuarrie: I think that my hon. Friend is confusing the issue. There are two different appointments. There is a harbour master for the fisheries harbour, appointed by the Secretary of State for Scotland, and he is the person who controls both harbours as regards all shipping. Then there is the harbour manager, who is the employee of the management company.

Mr. Fletcher: I am referring to the employee of the bay harbour management company. I am not referring to anyone at present employed by the fisheries harbour.
The staff of three employed by the management company, which includes the harbour master, as I understand it—

Mr. McQuarrie: No.

Mr. Fletcher: If I am advising the House wrongly about this, I shall have to return to my hon. Friend.
The right hon.Member for Orkney and Shetland (Mr. Grimond) asked why a quango was necessary. I suppose that a harbour trust of this kind is a quango, but we are also winding up a quango, in the form of the management company, so at least we are not adding to the number of quangos. It could be argued that a harbour trust is not formally a quango. It gives the best hope of reconciling the various local interests. The right hon. Gentleman will appreciate from his experience of harbours that fishery interests are very important and are well looked after by the fishermen themselves. Although it was considered that there might be a single harbour authority, this was the compromise which, following the consultation, seemed to suit all those involved.
The question why there was not a straight handover to private enterprise is affected by the age of the break waters and the possible maintenance involved in them, which we feel is better handled by a harbour trust, which has access to Government funds in a way that a commercial enterprise might not have.
The hon. Member for Caithness and Sutherland (Mr. Maclennan) talked about the merits of Wick and Peterhead. I do not wish to be drawn on that matter, but if he believes that Peterhead, because of its unique position under the Secretary of State, was favoured in any way, that is all the more reason for him to welcome the Bill, because it now puts Peterhead on an even-handed basis with other harbours in Scotland. I hope, therefore, that the hon. Gentleman will welcome the Bill, which I am happy to commend to the House.

Question put and agreed to.

Bill accordingly read a Second time.

Bill committed to a Standing Committee pursuant to Standing Order No. 40 (Committal of Bills).

Orders of the Day — York (Flooding)

Motion made, and Question proposed, That this House do now adjourn.—[Mr. Mather.]

Mr. Alexander W. Lyon: I represent one of the great cities of Europe, but for some of its inhabitants it has become something of a nightmare to live there. The cause of the problem can probably be set down to the Roman centurion who decided to build a town, which is now the city of York, at a ford in the Ouse, because the place that he chose has been throughout the centuries a place where flooding takes place.
The difficulty is that in the catchment area of the Ouse and the other rivers that pour into it, up in the Dales of Yorkshire, a considerable amount of water may come down at any one time. It has to come down the river and pass between the narrow banks of the city of York. Over a period the river has overflowed the banks. In the past 103 years it has flooded over them 62 times to a height of more than 12 ft. It enters property in York at about 13 ft 5 in, and over the past 100 years it has done that 20 times. The alarming thing is that, of those 20 occasions, 12 have been since 1965 and six since 1976. In other words, the incidence and frequency of flooding has increased over the years. I initiated an Adjournment debate on the same subject in 1968. For seven years after that debate it never flooded. I would like to think that, unlike Canute, I managed to turn the water back. In retrospect, I think that the water authority paid some attention to that debate. I hope that I shall have the same success tonight.
In 1968, I argued that areas by the river, known as the washlands—low-lying areas upstream from York—could be flooded at a time of potential flooding of the river around the city so that the water could be held there for a limited period and released back into the river when the flood had subsided. Some work was done on washlands up river almost immediately afterwards, which seems to have changed the incidence of flooding that preceded it. In the period immediately before 1968, the river flooded to a height of more than 13 ft at least once a year for four years. After that, it had not flooded for about eight years.
I should be happy if the Minister would tell me that she is willing to help the water authority preserve the remaining houses threatened by floods when the river rises above 13 ft 5 in, whatever the cause of the flooding. Perhaps I could better persuade her of that if I could also persuade her, as I tried to persuade the Minister in 1968, that the cause of the increase in the incidence of flooding is not just natural weather conditions but because when the water falls on the uplands it manages to get into the river more quickly. As a result, a potential flood in York builds up faster than it used to. The case that I made then, and make now, is that that has been caused by the increase in land drainage in the upland areas of north Yorkshire. Since the Ministry is anxious to increase the amount of land drainage, and gives considerable grants to help farmers undertake it, there must be a spin-off to protect the cities and residential areas downstream so that they are not placed at a disadvantage. It can be done.
Not only was the washlands experiment carried out after 1968, but in recent years work has been done on the Clifton Ings as a reservoir, and after the major flood in 1978 a bank built alongside the Leeman Road area successfully resisted the flood that occurred in January this

year. As a result, 400 houses were saved from flooding that hitherto had always been flooded when the river rose to a height of 16 ft 5 in. If that can be done for those 400 houses, I am anxious to preserve the other 250 houses that were flooded.
The 250 houses are in five different areas. Two of those areas are already scheduled, under the water authority's proposals, to have protective measures taken to help them to resist the flooding—the area around Ebor Street, and the area in Longfield Terrace. The work in Ebor Street was due to be started on the day the flooding began in January. I expect that that work will go ahead and that protection for those houses will be achieved within a reasonable time.
That would leave three other areas. One of them is Holgate Beck where the problem is that the water authority rightly put storm drains on the end of the beck to stop the river coming back up the beck in flood. Those storm drains have worked effectively. But water comes downstream from the areas where it was collected in the built-up areas above Holgate Beck and that means that water floods in the low-lying areas, and a substantial number of the houses are in that area. What is required is a pump at the end of the beck to pump the water into the river over the top of the storm drains. The water authority, I understand, is well aware of this, but cannot raise the £500,000 that is required to pay for it. I hope that the Minister will be able to give me some assurance on this point. The proposal is technically feasible.
The second area is the Marygate area, a low-lying area alongside the river in one of the environmentally desirable parts of York which could be protected by a wall along the river. It might be thought, as some councillors have already indicated, that it would be unsightly. I doubt that. The height of the wall that would be necessary, according to my information, seems not to be such that it would make it an undesirable part of the city's architecture. No one has carried out a technical survey to discover the cost. It cannot be a considerable amount, certainly nothing like the £500,000 for Holgate Beck.
The third area is where the Foss joins the Ouse. The water comes back up the river from the Ouse and also collects water coming down into the Foss from Tang Hall Beck and other areas. That area is much more difficult to protect. Although a barrage could be built along the mouth of the Foss, it would interfere with the waterway. People use it for both environmental and business purposes, especially one firm. Whether a barrage is technically feasible the water authority has not yet decided. However, it is clear, given the money, that it would be possible to safeguard the houses upstream.
The water authority or its predecessor, the river board, has recognised the danger of those houses but has always thought that the financial consequences of taking action was not justified by the incidence of flooding. Where the flooding is caused by the land drainage, as I suspect, or by a change in weather conditions, the incidence of flooding has increased to the extent where it is sheer hell to live in those houses. Each year, when the humidity increases, there is a danger that the water will come up from under the floorboards. Everyone in the area, particularly the elderly, are anxious about the possibility of another flood.
To find, within a year or two of a previous flood, that once again the carpets, the television set and the refrigerator are ruined and all the electrical installations have to be replaced while the water eats into the plaster


and woodwork is the kind of thing that no civilised person wants to tolerate. It is not good enough for the water authority to say that the work could be done but that the expenditure cannot be justified on the basis of the discomfort that is caused. It is crucial for those people that it should take place.
Although I recognise that the Foss area problem is especially difficult to solve, I maintain that it is desirable to do so. The number of residential houses affected in that area is fairly small—no more than about 50 or 60—but in addition many businesses are affected by the regular flooding. In at least two garages the possibility of the flood affecting the petrol exists during every inundation and other businesses must close down for some time before they can recover from the floods. The cost benefit of putting in such work would be considerable. For that reason, I hope that the Parliamentary Secretary will recognise that it is desirable.
I do no wish to strain the hon. Lady's patience by arguing the case for my suggestion about land drainage, because I know that the water authority and the Ministry dispute it, as they did in 1968 when I put the matter to my former colleague, Mr. John Mackie. Mr. Mackie told me on that occasion that the Ministry would be helped by a study that was about to be done by the Institute of Hydrology. I tried to get that study, but I found that there is only one copy available, which is in Oxford. I might receive it tomorrow. I noticed that it was referred to in an article in New Scientist on 21 January 1982. The institute said that in the area that it studied from 1966 to 1968, where drainage had taken place, there had been
quite a dramatic change in the run-off after drainage, The time between the water starting to rise and peak flow fell from five to 2½ hours once drainage was improved in the region supplying river water.
Therefore, it is not right to go on disputing the issue, as the water authority still does. The increasing incidence of flooding suggests that there is something in it. Whether there is or not, my constituents' premises are being flooded more and more frequently. It is desirable that something should be done to stop it. For that reason, I hope that the Parliamentary Secretary will say that the water authority will not be impeded in dealing with the problem by the limits that are at present imposed upon government spending. This problem must be solved quickly, and it would be to everyone's benefit if it could be done before the next flood came.

The Parliamentary Secretary to the Ministry of Agriculture, Fisheries and Food (Mrs. Peggy Fenner): I congratulate the hon. Member for York (Mr. Lyon) on the way in which he has brought to the attention of the House the very serious flooding problem in York. Most of us saw the pictures in the press and on television showing the streets and houses awash in that city, and I am sure that I reflect the views of hon. Members on both sides of the House when I express sympathy for those who have suffered by having their houses and business premises inundated.
Before I attempt to reply to the points that the hon. Member has raised I wish to explain where the responsibilities for flood alleviation in Yorkshire lie and how my Department is involved. Flooding in York is. of course, caused by the River Ouse and its tributaries. Because of its importance, the Ouse is designated as a

"main river" under the Land Drainage Act 1976, and improvements to it are therefore the responsibility of the Yorkshire water authority. As with all other water authorities, the land drainage and flood alleviation functions of the Yorkshire water authority are delegated to a regional land drainage committee which is composed of a chairman and three members appointed by my right hon. Friend the Minister, two members appointed by the water authority and seven members appointed by the county and metropolitan county councils. The chairman and members appointed by the Minister were chosen because of their knowledge and experience of land drainage, either as farmers or as members of internal drainage boards or as former members of the Yorkshire river authority. The members appointed by the water authority are able to bring to the committee their knowledge of other water services while the county council members have the knowledge of their own localities. They also represent the views of the ratepayers who pay for the land drainage work carried out by the authority through the drainage precept. So the committee has a balance of knowledge, experience and local representation which places it in an ideal position to decide what work needs to be done, what priority should be given to the various schemes and how much the ratepayers can afford to pay to finance the operations each year.
In June every year the committee submits to my Department a programme showing the capital works which it proposes to carry out each year for the next five years. In reaching its decision about the level of expenditure, the committee takes into account whatever guidance may have been given by the Government about public expenditure generally and, more importantly, what effect the programme will have on the drainage precept which is levied on the county councils and recovered through the general rate.
In the autumn when the Government have decided how much can be allocated nationally to land drainage and flood protection under the public expenditure programme for the forthcoming year, the committee is told by my Department how much is available to be spent in Yorkshire for the forthcoming year. The committee can then go ahead with detailed budget planning.
This is the stage at which we are at present. I am pleased to be able to tell the hon. Member that the amount allocated to Yorkshire for capital spending in 1982–3 is precisely what the land drainage committee asked for—£4½ million. So there is no question of the Government holding back the land drainage and flood protection programme in Yorkshire.
The hon. Member suggested, however, that even that sum—which is an increase on the amount allocated to Yorkshire in the current year—might not be enough. I am sure that he realises that I cannot give any firm commitments tonight, but I can assure him that if the water authority finds that it needs additional funds next year we will be prepared to consider any request that it might make. I ask him to bear in mind, however, that additional spending by the water authority would have to be financed in part by an increased precept on the general rate throughout the county. So it is not just a question of the Government allocating additional funds; it is also a question for the ratepayers throughout the whole of Yorkshire.
I turn now to the arrangements for dealing with the individual drainage or flood protection schemes. Those are


eligible for grant aid from my Department, and the grant rate in Yorkshire is currently 33 per cent. In order to qualify for grant, the committee has to submit details of each scheme in advance and my Department has to satisfy itself that the proposals are technically sound, that the cost is reasonable and that the probable benefit from the scheme is sufficient to justify the payment of grant.
I must emphasise that the initiative for deciding to put forward a particular scheme rests entirely with the land drainage committee. It must decide in the light of its knowledge of local conditions which schemes should be put forward for grant. The only constraints which the Government impose are first that the total capital expenditure in any year must not exceed the allocation and second that the scheme meets the conditions which I have mentioned.
It is against this background that I turn now to the recent flooding in York. First, the cause. On 2 January the upper parts of the Ouse catchment were covered by snow to a depth of about 18 in.—this is equal to about 1½ in. of rain. This heavy snowfall was quickly followed by a sudden rise in temperature of about 10 degrees Centrigrade. At the same time another 2 in. of rain fell in a period of 6 to 12 hours, followed by less intense rain during the next 36 hours. The soil was still frozen and as a result this mixture of melted snow and rain made its way quickly to the rivers. This led to the highest level of water ever recorded in the Ouse—16 ft. 7 in. above the average summer level and more than 6 in. above the record 1947 flood.
The hon. Member suggested that this flood was due to the amount of farm drainage carried out at the upper end of the catchment which resulted in more water from upstream reaching the urban areas downstream. I am advised that this is not the case. As I said, the soil in the catchment area was frozen, so none of the melting snow or the rainfall which followed could penetrate the soil to get into the farm drains. In any case, most experts are agreed that farm drainage usually reduces the amount of water flowing into the rivers—or, at least, delays it—as compared with rainfall on undrained land. The reason is that the underdrainage of land helps to dry it out more quickly. That, after all, is why farmers put drains in. As a result, after a short spell of dry weather the fields with underdrainage absorb the first few millimetres of rain, and the drains do not begin to discharge until the topsoil is soaked to full capacity. By contrast, the undrained fields will already be much wetter before the rain begins; they can absorb little extra water, so the run-off into ditches and streams begins very soon after. When the whole catchment is soaked to capacity, any additional rain runs off the soil at the same rate—much as it runs off concrete or tarmacadam roads. So my advisers do not accept the general argument that farm drainage generally worsens flooding down-stream. A further point, if one is needed, is that in any case very little of the land in the catchment of the River Ouse above York has in fact been underdrained.
I will deal now with the steps which the land drainage committee of the Yorkshire water authority has taken and is proposing to take to alleviate flooding in the city of York. Basically, there are two ways of preventing flooding in towns. One is to create flood storage areas upstream so that when the river level starts to rise the excess water can be diverted to or held in temporary reservoirs and released only at a rate which the river can handle without overtopping. The second method is to increase the capacity of the river itself by building banks which will contain the excess water.
Because of the configuration of the ground upstream and the undesirability of constructing large banks or walls within the city, neither of these methods can be adopted to the full extent at York. Some flood storage has already been provided at Linton Ings at a cost of £280,000, and another scheme at Clifton costing £1·2 million is almost complete. Within the city itself, some bank raising at Leeman Road successfully prevented the flooding of 300 houses, and another scheme estimated to cost £130,000 has recently been approved. A further scheme to protect the Longfield Terrace area is in the course of preparation. This is estimated to cost about £100,000. The hon. Gentleman referred particularly to that area.
I understand that the land drainage committee has other investigations in hand and that these may lead to further small schemes being prepared. The authority has assured me that any additional work which it may decide to carry out in 1982–83 can be accommodated within its existing budget. A major difficulty—as the hon. Member will recognize—is that, because York is a conservation area, and rightly so, drainage schemes tend to be more difficult to design and more expensive to carry out than in the average town or city.
I am, however, satisfied that the land drainage committee of the Yorkshire water authority has given and will continue to give full and urgent attention to the need to protect York from flooding. There has been no suggestion that lack of finance from the Government has delayed any of the work which the committee wishes to carry out. Indeed, we have so far been able to allocate to it all the funds for which it has asked and, as I have indicated, we are willing to consider requests for a modest increase if this is needed.
The debate has been useful. It is a little déjà vu for the hon. Member for York, but I have explained the background to the flooding. I hope that I have convinced him about the action which has been taken. I congratulate the hon. Member on raising a subject of so much importance to his constituency and I assure him that my Department will do all that it can to assist the Yorkshire water authority in its endeavours to remove the threat of flooding from York.

Question put and agreed to.

Adjourned accordingly at ten minutes past Twelve o' clock.